Great conversation between the two of you guys !

It has been very instructive and I've reached more or less the same conclusion as you have.

Squeeze Protection Price (SQPR) should be set higher so that margin call orders are executed against part of the order book or at very least, sits near the first seller.
Keep a low maintenance collateral ratio (MCR) in order to allow a higher degree of leverage.

I'm not sure you are allowed to set these two parameters independently.

The doc has been written by @xeroc I think, maybe he could enlight us with its knowledge.

I mean raising MSSR takes the leverage away from shorters. And some of them will suddenly get into the margin call zone. Changing MSSR from high to low is fine, no harm to nobody, it is changing the other way around that can piss off some people.

I can announce the change and let shorters adjust their collateral during days before I actually change it. Another way to do it would be to increase it by 5% every x days until reaching the new value.

Do you also need to adjust MCR if you change MSSR?

Good question ... I'm not sure the doc answer this question .. Xeroc ?

Quote from: EstefanTT on January 04, 2017, 06:46:03 pm

I don't know if BTWTY can be qualified as a dreamcoin but so far its growth has been quite impressive.

Charts : www.bittwenty.com

It has tiple its price in 18 months ... so ... now that we have something cool to sell out to the world, we just need THE whale to buy BTS, borrow and sell BTWTY, move up the BTS market faster than the BTWTY grows and everybody get its reward ! The whale have its ROI and long terme investors in crypto have a fast growing crypto index fund.

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Very good.  It definitely fits what I was thinking of in the OP.

I've made the coin, you find the whale ... deal ? ;p

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Hello everyone,

The BTWTY market has been growing nicely these last first days of its existence. It still a baby market but I intended to keep it that way for its firsts steps into the world. As soon as I'll feel comfortable enough with the settings, I'll start promoting it in a more intensive and extended way.

With that said, the market just had its first margin called order and that brings an important question. You can see it in the next snapshot:



This brainstorm will probably be useful in the future for other BitShares smartcoins that will trade with an important premium.

The "problem" is the next one. The margin call order is sitting way behind the first buyers. If the market keeps trading BTWTY that high compare to the price feed, this order will never be filled.
In that case, if the price of BTWTY keep growing and BTS remain stable, a black swan event will be triggered at some point. We are still far from this possibility but something has to be done in order to diminish the probability of such happening.

My first reaction was to consider increasing the MSSR. It is at 110% at the moment.

Yvv from this forum share with me the fact that :

"The problem is that when you increase MSSR, you increase a safe collateral ratio too, which is equal to MSSR*MCR. This may fix the margin call problem in short term, but it may have negative impact in long term, because collateral ratio is what determines leverage (lower CR = higher leverage). Higher leverage (lower CR) makes shorting more attractive. This issue needs some good brainstorming before taking any actions."

The margin call mechanism is complex and sometimes confusing. I would love to have you opinion on the situation.

 

All this margin call mechanism is VERY confusing. Not sure that increasing MSSR is a good idea.

I agree, complicated, it is !

The problem is that if I let those margin call orders to far below the real price of the market, they won't be filled and when BTWTY will reach a higher price that could trigger a black swan.

That's why I can't let this 110% at the moment. The premium is really high and I need that margin call orders looks kind of interresting for shorters.

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I don't know if BTWTY can be qualified as a dreamcoin but so far its growth has been quite impressive.

Charts : www.bittwenty.com

It has tiple its price in 18 months ... so ... now that we have something cool to sell out to the world, we just need THE whale to buy BTS, borrow and sell BTWTY, move up the BTS market faster than the BTWTY grows and everybody get its reward ! The whale have its ROI and long terme investors in crypto have a fast growing crypto index fund.

Sent from my SM-G935F using Tapatalk

It is actually a good time to short, since it is traded at over 100% premium from peg. You can short bit20 now, buy underlying altcoins, then wait when bit20 price drop to peg price and settle debt with profit.

It's indeed a good time to short (not an investment advice). The index is trading way above the feed price.
It has it's logic when you consider it has been growing quite steadily since its creation. With that said, I don't believe the price will drop back to the peg. I imagine it will keep trading above but probably not that much above.

Publisher @Fox set MSSR=150%，others 110%，why？

Nice catch, it's 110. It will be adjusted. Thanks 天籁 !

On the 21st day of every month, Bit20 runs an algorithm that creates its new composition. By this process, it always includes the most promising coins. Some coins appear in the index and others disappear. Some of them gain weight and other lose some of it.

This new composition swap with the previous one without any disturbance of the index price.

We have run this operation today. Here is the new composition of the Bit20 Index Fund:

BTC / 10 % / 0.35831181695703 coins / 799.821 USD
ETH / 10 % / 37.199209735944 coins / 7.70407 USD
LTC / 10 % / 78.238296619253 coins / 3.66298 USD
XMR / 10 % / 33.772219777015 coins / 8.48583 USD
ETC / 10 % / 251.16149806351 coins / 1.14104 USD
DASH / 8.7433342390011 % / 24.658628597813 coins / 10.1616 USD
MAID / 5.2747667050028 % / 1601.6463697779 coins / 0.0943823 USD
XEM / 4.1356821886812 % / 31852.260162871 coins / 0.00372101 USD
STEEM / 3.9711412874907 % / 810.28584634357 coins / 0.140453 USD
REP / 3.8166925154033 % / 38.930540199065 coins / 2.80964 USD
ICN / 3.5079674915334 % / 307.90518157442 coins / 0.326507 USD
FCT  / 3.1909651978308 % / 30.978867219368 coins / 2.95196 USD
DOGE / 2.8887791504422 % / 380021.98060263 coins / 0.000217851 USD
WAVES / 2.6213206871199 % / 353.91400180968 coins / 0.212264 USD
XLM / 2.4693787079238 % / 24496.278131841 coins / 0.00288896 USD
DGD / 2.3290265860039 % / 7.0782800361936 coins / 9.42976 USD
PEERPLAYS / 2.3032139917805 % / 3.5391400180968 coins / 18.6505 USD
LSK/ 1.8395816647623 % / 356.73730553889 coins / 0.147783 USD
GAME / 1.5350986397995 % / 210.33401465615 coins / 0.209161 USD
EDR / 1.3730509472244 % / 48.208871895696 coins / 0.816232 USD

The composition is sent in the BitShares Blockchain so the witnesses can read it and publish the price in the decentralised exchange. Here it is :

http://cryptofresh.com/tx/14d715654ce5b724f4c27dd54982a84ee1d72c2f

Don't hesitate anymore and have a look on the Bit20 market : BitShares Decentralised Exchange pair (BTWTY : BTS)

You'll find on the website the composition with the updated price of each coin and the total value of the index



(BitShares almost make it but yesterday it went out of the index just before the revision happened ... next time, we'll be there !!!)