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« on: July 29, 2016, 03:21:21 pm »
smartcoin economy and current bitCNY status
smartcoin is not only stable currency, but also financial leverage tool.
shorters use this leverage tool to fulfill financial needs by borrowing smartcoins from system, for bitCNY, the 1% force settlement offset and 0.5% force settle volume limit greatly reduce the shorters' worry of being force settled, even their debt position are force settled, they always have big chance to buy back BTS from market without loss. in summary, this setting make the user experience of the leverage tool much better than before, that is why bitCNY supply doubled in 5 weeks.
then is bitCNY devalued by 1%? things are not simple, now bitCNY express its value by trading, or by withdrawing to fiat CNY, in both ways it is not devalued, however in both ways transwiser play an important role. this lead to another question - does bitCNY's value depend on transwiser's service?
in my opinion in smartcoin economy gateways and market makers are must and play important role, they help exact pegging and provide liquidity, however, this is not to say that the smartcoins' value depend on their service, we can also say it's smartcoins' own value make the gateway and market making service possible.
force settlement should not be seen as a common value express, it is "last resort", I don't think we can expect merchants to accept smartcoins just because of the 100% force settlement, a gateway service is always needed for merchants to accept smartcoins.
bitCNY now has a supply of 1.57M, in my view the supply may reach 5M at the end of this year, frankly speaking, as a gateway transwiser now face bigger chanllenge than before, now most bitCNY finally come to transwiser as an exit but seldom people buy bitCNY from transwiser, to balance the liquidity flow, transwiser need to try to make bitCNY trading base for more markets in DEX, and also need to try to build something like CNY-USD exchange channel with the help of bitCNY,bitUSD/USDT.
bitUSD's current status and change proposal
generally speaking, bitUSD is now in low supply(about 115k), low trading volume and bad pegging(bitUSD always worth 5~10% higher than fiat USD)
I am not sure why things are like this, but in the past we do not have a good channel to do bitUSD/fiat USD conversion, now thanks to OpenLedger's work, we now have OPEN.USDT to play the role of bridging bitUSD and fiat USD, now any market maker can do more in bitUSD market to provide liquidity and help exact pegging, but at that stage the same problem that has puzzled bitCNY ecosystem will also appear here - how to encourage shorters to generate more bitUSD?
here I propose the same solution to bitUSD as had applied to bitCNY - change the force settlement offset to 1% and max hourly force settle volume to 0.5%, currently the two parameter values for bitUSD are 0% and 20%.
The force settlement offset can be seen as a service fee that holder pay to the settled shorter at the time of force settlement. The offset need to be a proper value that can balance the risk of holders and shorters. A 0 offset is not reasonable enough as in common financial logic the collateral should not be force settled without any compensation if the collateral price does not fall below the margin call price. On the other hand, if the offset is set too high, force settlement will be unfeasible as "last resort" for value express. another parameter - the max hourly force settle volume - should be low enough to prevent sudden settlement to force shorters out quickly. experience in bitCNY shows the 1% offset and 0.5% max hourly force settle volume are comparatively reasonable combination.
this poll is to collect opinions from community, next, similarly, BSIP and maybe also worker proposals will be created, and finally if there are enough support, a committee proposal will be created to implement the change.
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