Providing yield on USD doesn't work because of yield harvesting, people would create USD and sit on it until the rate of return approached 0.

I forget why the short couldn't pay the long directly, thereby negating the yield harvesting problem?

I'm not sure what you're trying to say.  It's a given that BTS cannot be transferred in the OP scenario.  But user will still be able to transfer BTC to Poloniex and trade a POLO.BTS token.  They'll also still be able to move funds from Poloniex to the DEX by buying BitUSD (or BitCNY) and then transfering THAT to the DEX.  Sure, it would be less practical for users, but that just means fewer people moving funds to the DEX. And from Poloniex's standpoint there would be NO CHANGE, other than disabling BTS transfers on their withdrawal page. 

Where does polonix get the BTS to back the POLO.BTS token?

Either:

1. They have to hold a massive stash of real BTS to cope with wildly varying demand
2. They have to somehow convert real BTC into a DEX BTC.IOU (no existing infrastructure), then trade it for BTS on the DEX

Neither of these options is going to be tenable for them; they have to become a bridge, and what you are suggesting is that polonix print BTS out of nothing.

edit: think about it some more; how can their POLO.BTS token affect the price of BTS when no arbitrage is possible? It would be totally pointless.

Quote from: puppies on February 17, 2016, 06:45:28 pm

Have all the exchanges been notified?

I just wrote
- poloniex
- bittrex
- yunbi
- ccedk
- shapeshift
- btc38

We (metaexchange) already know about this, but we'd still appreciate being notified officially

1. In a consensus schelling game, all that really matters is that you come to consensus on **something**. If someone pulls off a P+epsilon attack, and makes it confirm 0 instead of 1, that's fine; as long as it doesn't flip-flip forever and as long as it converges to 1 at least some of the time. In the price feed case, converging on the wrong price even once is BAD.

I don't follow your reasoning; in a system where majority is truth, 'truth' is not always justice. This manifests itself as double spends in consensus, which can be equally as damaging as converging on the wrong feed price, IMO.

The price feed is our weak point when it comes to "trust" and the total damage that can be caused by a compromise.  Perhaps we can explore ways securing the price feed to reward accurate production and punish inaccurate feeds.

If this works for the price feed, why wouldn't you just use it for the entire currency?

Isn't this the main reason why no bridge - you or anybody else even thinks about providing BTC->bitBTC bridge? The proposal effectively locks as much BTS as if you sold BTS for the BTC received at the current price and nothing more. Isn't this a good deal. This is effectively equal to what happen if it was a bridge for  BTS<->BTC.

To be honest, the main reason was a complete lack of demand. We had a bitBTC/BTC pair, but no one used it, so we dropped it. Your proposal does ease the creation of bitBTC compared to the existing design.

Quote from: monsterer on February 16, 2016, 05:40:35 pm

Quote from: tbone on February 16, 2016, 05:05:28 pm

Ok, that makes sense.  So now the question is, why is no one doing any of this instant arbitrage between the various versions of the same assets on the DEX?  Without that, instead of realizing the promise of pooled liquidity, we're mired in a shit storm of duplicate assets that is making the DEX unusable for most people.

They cannot. This would need the blockchain to perform this operation atomically and react instantly. It would be like a built in HFT trader the dividends of which get distributed to BTS holders.

Ok, but apart from the atomic operations you refer to, shouldn't trading only on the DEX allow for MUCH easier arbitrage for any liquidity provider given they don't have to deal with slow deposits/withdrawals between their wallet and their account at the exchange?

I don't think it makes that much difference - you still have to convert native currency into bitshares assets, which requires a bridge which has confirmations. You might argue that it's faster if they keep an all bitAsset inventory, but that's not the case either because you can do the same thing now, by keeping an inventory across multiple exchanges.

Quote from: monsterer on February 17, 2016, 08:37:01 am

Quote from: CoinHoarder on February 17, 2016, 02:02:29 am

A. You misunderstood what I was saying and pretty much repeated the same thing I said, but added sunny skies and rainbows. Someone that wanted to monopolize the BTS volume traded on centralized exchanges may come along sooner than you think, and there is no way of stopping them.

How are they going to do that when you cannot transfer the asset?

holding bitAssets like any indivindual?No?

How does an exchange holding bitAssets allow them to arbitrage BTS?