181
General Discussion / Re: One way or another the PEG will be established...
« on: August 28, 2014, 08:32:34 pm »
Seriously, this is not the right way to do things... What is the flaw or what is wrong with my proposal?!
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182
General Discussion / Re: BitUSD is not an interest bearing bond.
« on: August 28, 2014, 05:57:12 pm »The bond market is something completely new and separate. It's just something useful to do in addition to creating BitUSD. BitUSD that tracks accurately would need to be created before you can create a bond market on top of it.I think implementing the price feed will stabilize the price at $1 pretty quickly as long as it is done reasonably soon.I appreciate the necessity to maintain an accurate peg, both quickly and to term. I am failing to make the connection between the influence the price feed has on the creation/issuance of the bond you reference.
-Respectfully
183
General Discussion / Re: BitUSD is not an interest bearing bond.
« on: August 28, 2014, 05:47:20 pm »@Agent86I think implementing the price feed will stabilize the price at $1 pretty quickly as long as it is done reasonably soon. If we wait too long and too much undervalued bitUSD is brought into existence it could take a long time (if ever) for the price to recover.
Does the current discrepancy in the peg (purported to be ~5-15%) represent anything beyond bitUSD market risk? Are you proposing to convert this risk into a new bond instrument (perhaps bitUSDbond) to stabilize the peg? How does (re)implementing a bitUSD price feed impact the bond instrument pricing movement over time?
184
General Discussion / Re: BitUSD is not an interest bearing bond.
« on: August 28, 2014, 05:06:13 pm »
Another way to look at it is this: People who want to short USD really bad to get the more upside exposure to BTSX will either have to compete to short at $1 or they will have to pay interest via issuing a bond. They can't just screw up the peg.
185
General Discussion / Re: BitUSD is not an interest bearing bond.
« on: August 28, 2014, 04:53:16 pm »Ok so you would move the current market into a separate vehicle on BTSX as an 'interest bearing bond'I think you are confused about what I'm proposing…QuoteInterest bearing bonds require a separate market and implementation from the core BitUSD market.
I am not proposing to move current market into a separate vehicle… I'm saying implement bitUSD correctly so that it actually tracks. Doing so opens up the door to the creation of an interest bearing bond market. This bond market is what allows people to deposit dollars into the bank of BTSX and get a market based return on their deposits.
However if I'm a BitUSD buyer.Under my proposal you'd be very lucky to buy a bit USD for 0.9 and will have no trouble selling it for more if you do. I'm also not proposing using a "range."
Will I prefer to buy at 0.9 on your price fixed market, where I may not be able to find a seller at times because the price is fixed and people may at times not want to buy within that range.
Or would I prefer to buy my BitUSD on the other market at a better rate or interest rate, where I also know I can always find a buyer.Buyers will gravitate away from the "free market" (current implementation) specifically because it doesn't work and doesn't guarantee a buyer.
It seems BitUSD buyers would gravitate to the free market which is also paying them a better price to buy.
(I don't know if this makes sense, but for me, another way of looking at the current price is that if you price fixed at exactly 1-1 via price feed. BitUSD Shorts today would be willing to short at 1-1 and give the person going long a few BTSX per dollar as bonus to take the other side because they want to leverage their BTSX position that much. Longs would always choose the biggest bonus. Hence any other market on the same system wouldn't attract the longs.)You might have lost me here but to clarify: The market matches your buy orders with the lowest priced bitUSD so you don't have the option to not buy the lower priced bitUSD in order to buy the higher priced bitUSD that the shorts are selling.
186
General Discussion / Re: BitUSD is not an interest bearing bond.
« on: August 28, 2014, 04:16:39 pm »Yes, we currently have a problem of not enough buyers because we are allowing shorts to sell newly minted USD onto the market under the value of a dollar.Agent86, In your system, lets say I have BitUSD to sell but there are currently no buyers at 0.9 vs. the dollar. Who do I sell to?You'll generally have no problem finding buyers if you are selling BitUSD under the value of a dollar. The shorts have to close out their position to get their shares back sometime and they'll see bitUSD selling for less than the price of USD as a great opportunity to close out their position profitably. Also, no more bitUSD will come into existence until the market has corrected and people have scooped up the bitUSD.
We currently do have a problem finding buyers for BitUSD under the value of a dollar?
187
General Discussion / Re: BitUSD is not an interest bearing bond.
« on: August 28, 2014, 04:01:00 pm »Agent86, In your system, lets say I have BitUSD to sell but there are currently no buyers at 0.9 vs. the dollar. Who do I sell to?You'll generally have no problem finding buyers if you are selling BitUSD under the value of a dollar. The shorts have to close out their position to get their shares back sometime and they'll see bitUSD selling for less than the price of USD as a great opportunity to close out their position profitably. Also, no more bitUSD will come into existence until the market has corrected and people have scooped up the bitUSD.
188
General Discussion / Re: Litecoin Sharedrop Fork
« on: August 28, 2014, 03:44:45 pm »This is a business and creating competition for BitsharesX and giving a group of people equity for free is not a good idea at this time.
189
General Discussion / Re: BitUSD is not an interest bearing bond.
« on: August 28, 2014, 01:35:41 pm »If we limit shorts then you are resorting to price fixing. The peg is supposed to have some variance based upon supply and demandIt's not price fixing and there will still be some variance above or below with supply and demand but there will be legitimate reasons for it to quickly converge and variance will be tight. It's not price fixing because the market for bitUSD vs. BTSX is free. It just prevents new BitUSD being created at a value below the dollar which is unfair to bitUSD holders who expected their asset to track the dollar.
In your limit scenario I can see some benefits... you reduce selling pressure below the price feed. This would give USD sellers a priority over shortsCurrent holders of bitUSD willing to sell below parity deserve priority over shorts.
But right now USD is liquid at a price that is correlated to USD.If the moving average moves down and someone shorts a million bitUSD into existence at a price way below the dollar I think you'll quickly find that no one is jumping in to buy this "bargain" priced bitUSD.
But this introduces a requirement for a price feed and the purpose of this experiment is to attempt something without a price feed.I think the end goal is to create bitUSD that tracks without centralized counterparty risk. I don't think we need to be dogmatic about the price feed because the price feed is done in a robust decentralized way that is very hard to manipulate.
190
General Discussion / BitUSD is not an interest bearing bond.
« on: August 28, 2014, 12:36:55 pm »
I want to give clarity about the difference between BitUSD and interest bearing bonds and how market based interest rates can be established. I also want to emphasize what is needed to fix the BitUSD peg.
A couple comments from bytemaster have motivated this post:
BitUSD is not supposed to have an associated interest rate. It's just supposed to track the dollar. People will buy a bitUSD that reliably tracks the dollar for the purpose of facilitating trade, not for getting interest.
The current BitUSD market implementation is flawed and the peg is not working. The notion that the difference between USD and bitUSD price is an "interest rate" is inaccurate. There is nothing stopping the bitUSD price from falling further without intervention.
The method to fix the peg is to use the price feed to limit the creation of new bitUSD by preventing shorts from shorting below the USD price.
Interest bearing bonds require a separate market and implementation from the core BitUSD market. A BTSX holder can sell a collateralized promise to pay a certain amount of bitUSD at a certain date in the future. There can then be a "bond market" for these promissory notes. The present day value of these future promises to pay BitUSD will determine short term and long term interest rates.
The first step however is to get the bitUSD implementation to accurately track the dollar. And for this we must use the price feeds as I've described.
A couple comments from bytemaster have motivated this post:
BitUSD is a market between those who want leverage and those who want stability. The "price" in this market will depend upon the interest rate people are willing to borrow at to get the leverage they desire.
Bottom line, you cannot get rid of "interest rates" or "premiums" by resorting to price feeds or price fixing.
BitUSD is not supposed to have an associated interest rate. It's just supposed to track the dollar. People will buy a bitUSD that reliably tracks the dollar for the purpose of facilitating trade, not for getting interest.
The current BitUSD market implementation is flawed and the peg is not working. The notion that the difference between USD and bitUSD price is an "interest rate" is inaccurate. There is nothing stopping the bitUSD price from falling further without intervention.
The method to fix the peg is to use the price feed to limit the creation of new bitUSD by preventing shorts from shorting below the USD price.
Interest bearing bonds require a separate market and implementation from the core BitUSD market. A BTSX holder can sell a collateralized promise to pay a certain amount of bitUSD at a certain date in the future. There can then be a "bond market" for these promissory notes. The present day value of these future promises to pay BitUSD will determine short term and long term interest rates.
The first step however is to get the bitUSD implementation to accurately track the dollar. And for this we must use the price feeds as I've described.
191
General Discussion / Re: Where have all the bids gone?
« on: August 27, 2014, 03:57:57 pm »How much BTC from AGS funds do I get if I'm right and bitUSD crashes or I convince you to make the change (preferred)? Although I don't want to disincentivize changes... How much if my solution works?Price of bitUSD crashes to worthless unless you do something.Ok, put you money where your mouth is... which way will the peg go? From where I sit the peg is behaving perfectly given the low supply of liquidity providers.Before answering, can I ask if you have a means to stop trading on short notice? (such as delegates remove feeds) - I don't want to make a problem worse.
I can stop trades by removing required depth.
If you believe that then you should be shorting it
192
General Discussion / Re: Where have all the bids gone?
« on: August 27, 2014, 03:13:43 pm »Price of bitUSD crashes to worthless unless you do something.Ok, put you money where your mouth is... which way will the peg go? From where I sit the peg is behaving perfectly given the low supply of liquidity providers.Before answering, can I ask if you have a means to stop trading on short notice? (such as delegates remove feeds) - I don't want to make a problem worse.
I can stop trades by removing required depth.
193
General Discussion / Re: Where have all the bids gone?
« on: August 27, 2014, 03:03:48 pm »Ok, put you money where your mouth is... which way will the peg go? From where I sit the peg is behaving perfectly given the low supply of liquidity providers.Before answering, can I ask if you have a means to stop trading on short notice? (such as delegates remove feeds) - I don't want to make a problem worse.
194
General Discussion / Re: Where have all the bids gone?
« on: August 27, 2014, 03:00:28 pm »They can also short below price X but it is not valid unless the exchange rate drops.to clarify by "not valid" I mean these shorts do not appear on the standard order book and can not be matched with buy orders for bitUSD.
195
General Discussion / Re: Where have all the bids gone?
« on: August 27, 2014, 02:55:59 pm »With "price fixing laws" all trades are still voluntary... they just don't happen.People can short at price X or above. They can also short below price X but it is not valid unless the exchange rate drops. If two people both happen to short at the same price then the person who got their order in first gets first dibs but something like this already must be used. Trades will still happen; some people want to increase their exposure to BTSX and others want dollar valued crypto.
There is a supply/demand dynamic at play here. If you only allow people to short at price X and there are 2 people that both want to short at that price, who goes first?
I think you're also not appreciating the severity of the problem, this needs to be fixed or the peg will not hold and will be irreparably destroyed.
