we learnt a lot after BSIP42 implementation, now we need to consider more on how to update bitCNY, actually there are a lot discussion on this topic in the community, especially in Chinese community, here I'd like to propose some new solution summarizing all the opinions.
1. change the way to handle black swan, keep the borrowing operation alive.
global settlement is a too direct and too hard way to handle black swan, it stop the smartcoin borrowing business, while it happen it always give big negative impact on smartcoin ecosystem, we can see that bitUSD devalued a lot after the global settlement, the community require a more soft way that has more little negative impact on the smartcoin ecosystem.
abit has suggested 2 new ways to handle black swan, one is to settle the accounts independently:
https://bitsharestalk.org/index.php?topic=27273.0, one point is that this way may cause one phenomena that "to be settled earlier is better than later".
the other is to set feed price floor to provide black swan from happening:
https://bitsharestalk.org/index.php?topic=27449.0the current bitCNY is similar to be handled in the second way.
either way we will choose, it is important not to stop the smartcoin borrowing operation.
2. replace BSIP42 with dynamic MCR solution
the key point of dynamic MCR is also to introduce negative feedback mechanism to adjust smartcoin supply, different with BSIP42, in dynamic MCR solution the feed price will return to reflect the market price, then this solution will not bring the troubles of "margin call orders not being eaten" or "exploiting debt position owners with force settlement".
considering that in BSIP witnesses take the key responsibility and authority, this introduce much uncertainty and put witnesses at the place that undertake much doubts of feed price manipulation, here I suggest a new way to implement dynamic MCR:
2.1. other than settlement price, CER, MCR, MSSR, introduce a new parameter premium to be fed by witnesses。witnesses need not to design complex negative feedback algorithm, they just need to get the price data from the market and feed to system.
2.2 add committee controlled parameters as below to each smartcoin:
low premium limit: when the fed premium is lower than this parameter, the process to make MCR higher will be triggered, default value: -2%
high premium limit：when the fed premium is higher than this parameter, the process to make MCR lower will be triggered, default value: 1%
max MCR：MCR will not increase while it reach this value, default value: 1.75
min MCR：MCR will not decrease while it reach this value, default value: 1.4
MCR tuning step：the value that MCR can be added or subtracted in each administrative period(1 hour), default value:0.001
at each administrative time system will check the feed premium and decide how to adjust MCR, if the parameters are set as default values shown above and at the time MCR=1.75, and premium=2%, then MCR will be adjusted to 1.749.
in this way the traders can expect the adjustment time and step, the can reflect in time to avoid being hurt, no manipulation doubt can be put to witnesses.
3. adjust MSSR to 105%
4.change force settlement offset to 2%, this will ensure that the discount of bitCNY will be no higher than 2% even after MCR reach the max limit.
what will this solution bring?
1. good peg of bitCNY
2. less volatility of BTS price
3. more risk?
4. less free market?
easy to understand that this solution will lead to good peg of bitCNY, as BSIP42 has proved, negative feedback mechanism works well on making a good pegging.
as MCR will change according to the premium of bitCNY, when bitCNY is in shortage and has a big premium, system will increase MCR and make more bitCNY supply possible and vice versa, for example, if we implement the solution at the current market status, we can expect that the MCR will be tuned to min value(maybe 1.4) in about 2 weeks, this will increase bitCNY supply obviously and can prevent BTS price from falling rapidly.
so will this solution introduce more risk to the system?
I believe this will depend on whether the margin call orders will be eaten quickly, the main issue of BSIP42 is that is make the margin call order price higher than the market price and accumulate big quantity of margin call orders without being eaten. but in the dynamic MCR solution, as feed price reflect the market price, we believe the margin called orders will be eaten just after they comes out, if necessary MSSR can be keep unchanged to ensure this.
and, I don't agree that this rule will bring a manipulated market that has been free when there is no such solution, they are just markets with different rules, if the rules are certain and base on strong consensus, it will not bring manipulation, it just bring better user experience.
I also suggest that witnesses can implement updated BSIP42 before community can reach consensus on above described solution and implement it.
https://bitsharestalk.org/index.php?topic=27492.0
Show Posts
