Author Topic: BitAssets 3.0 - For Community Review  (Read 22011 times)

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Offline Stan

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Re: BitAssets 3.0 - For Community Review
« Reply #90 on: April 24, 2015, 12:49:06 am »

#3 Any time someone with USD is unhappy with the current internal market price, they can request settlement at the 99% of feed (a 1% fee) in X days, where X is more than 24 hours.


Why does X need to be more than 24 hours? Why can't it be "instant" for example?


To prevent an attacker from exploiting time delays in the feeds, and other implementation artifacts to bot-harvest that 1% for reasons other than the intended liquidity.  Neither side can know exactly which way the feed will move 24 hours from now, so we get a more fair result.

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Offline starspirit

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Re: BitAssets 3.0 - For Community Review
« Reply #91 on: April 24, 2015, 01:20:19 am »

#3 Any time someone with USD is unhappy with the current internal market price, they can request settlement at the 99% of feed (a 1% fee) in X days, where X is more than 24 hours.


Why does X need to be more than 24 hours? Why can't it be "instant" for example?


To prevent an attacker from exploiting time delays in the feeds, and other implementation artifacts to bot-harvest that 1% for reasons other than the intended liquidity.  Neither side can know exactly which way the feed will move 24 hours from now, so we get a more fair result.
I can't imagine time delays in the feeds being more than a few minutes, so I assume the second part is the bigger driver? Would you mind clarifying what you mean by "other implementation artifacts to bot-harvest that 1%"?

Offline Stan

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Offline starspirit

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Re: BitAssets 3.0 - For Community Review
« Reply #93 on: April 24, 2015, 02:31:02 am »
https://bitsharestalk.org/index.php/topic,15775.msg202669.html#msg202669
BM says "The 24 hour+ delay means you cannot depend upon errors in the price feed to guarantee a profit", which basically reiterates that X needs to be greater than the lag in the price feed, which surely is not that long. Did I miss something there?
Why couldn't the delay be reduced to 10 minutes for example?

Offline bitmeat

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Re: BitAssets 3.0 - For Community Review
« Reply #94 on: April 24, 2015, 03:19:01 am »
BM says "The 24 hour+ delay means you cannot depend upon errors in the price feed to guarantee a profit", which basically reiterates that X needs to be greater than the lag in the price feed, which surely is not that long. Did I miss something there?
Why couldn't the delay be reduced to 10 minutes for example?

I think it's fine to give an opportunity for all timezones to participate and band together against a whale manipulator, and thus provide a truly fair price of settlement. Think of it like a miniature fire sale auctions that last 24 hours. :)

Offline starspirit

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Re: BitAssets 3.0 - For Community Review
« Reply #95 on: April 24, 2015, 04:59:17 am »
BM says "The 24 hour+ delay means you cannot depend upon errors in the price feed to guarantee a profit", which basically reiterates that X needs to be greater than the lag in the price feed, which surely is not that long. Did I miss something there?
Why couldn't the delay be reduced to 10 minutes for example?

I think it's fine to give an opportunity for all timezones to participate and band together against a whale manipulator, and thus provide a truly fair price of settlement. Think of it like a miniature fire sale auctions that last 24 hours. :)
Do you mean to say that if an extremely large settlement request is made, global community awareness of the pending settlement means that the requestor cannot as easily manipulate the BTS market price at the time that settlement occurs? Hopefully this equally prevents a whale short with the lowest collateral from also being able to manipulate the price to their benefit.

Thanks for the clarifications. While it makes sense to me now that a delay period is the prudent thing to do here, I do wonder what commitment the community actually has to prevent such a manipulation, when it won't be clear whether erratic price movements are manipulation or the real thing. While I'm not recommending this, I wonder if there are other things that can be done to thwart manipulators, such as having a random element in the settlement timing with an alert once complete.

Offline bitmeat

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Re: BitAssets 3.0 - For Community Review
« Reply #96 on: April 24, 2015, 05:09:30 am »
Do you mean to say that if an extremely large settlement request is made, global community awareness of the pending settlement means that the requestor cannot as easily manipulate the BTS market price at the time that settlement occurs? Hopefully this equally prevents a whale short with the lowest collateral from also being able to manipulate the price to their benefit.

Thanks for the clarifications. While it makes sense to me now that a delay period is the prudent thing to do here, I do wonder what commitment the community actually has to prevent such a manipulation, when it won't be clear whether erratic price movements are manipulation or the real thing. While I'm not recommending this, I wonder if there are other things that can be done to thwart manipulators, such as having a random element in the settlement timing with an alert once complete.

Well, to clarify, that's my interpretation. Also - I think the "commitment" will come naturally, because inefficiencies in the market will be taken on by speculators.

Offline starspirit

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Re: BitAssets 3.0 - For Community Review
« Reply #97 on: April 24, 2015, 06:29:08 am »
Another thing I'm still unclear on - why is there a preference shift for bitAsset shorts to be rationed by collateral on offer, rather than interest rate they are willing to pay?

I'm still trying to understand what the map of the system looks like and what the role of the bitAsset is within it. For example, if there is a plan to have a bond market and the like, how do bitAssets integrate with that?
Are we just talking about bitCurrencies having bond markets or all bitAssets?
Is bitUSD akin to cash, with at-call deposits and a bond market both to be separately defined, or is bitUSD the complete at-call market, with only a bond market behind that.
And is the bond market risk-free or credit-based? Or both?
Or does the map look completely different to this?

A map for context would be helpful in thinking about how proposed changes improve the fit of any component (e.g. a bitAsset) to its envisioned role within a broader system.

Offline milkmeat

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Re: BitAssets 3.0 - For Community Review
« Reply #98 on: April 24, 2015, 08:11:43 am »
The current BitAsset system will be run in parallel with the new system users can migrate at will.
Interesting. Would the old system ever be completely phased out?

Probably once the shorts unwind and people stop using it.

What if the current BITUSD/BITCNY owner never sell their asset? For example their private key is lost in fire.
So some short seller will have to renew their position forever?

Offline liondani

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Re: BitAssets 3.0 - For Community Review
« Reply #99 on: April 24, 2015, 09:13:50 am »
The current BitAsset system will be run in parallel with the new system users can migrate at will.
Interesting. Would the old system ever be completely phased out?

Probably once the shorts unwind and people stop using it.

What if the current BITUSD/BITCNY owner never sell their asset? For example their private key is lost in fire.
So some short seller will have to renew their position forever?
That's why we need an implementation that allows us to cover with our remaining collateral!
Can @bytemaster confirm they will do it ? It is very crucial for many of us!

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Offline bytemaster

Re: BitAssets 3.0 - For Community Review
« Reply #100 on: April 24, 2015, 12:55:49 pm »
24 hour delay is to give shorts NOTICE so they can start topping off their collateral if they want to keep their position.
Shorts can always reduce their collateral after the settlement as long as it stays above maintenance.
Shorts can enter a market order to cover their entire position using their collateral at any time.

In effect shorts only need the extra collateral for the moment of the settlement which means that someone who is pro-active can write a bot to always bump up their collateral if they are at risk.   Of course many people may try this and they will all likely post at the last moment like an ebay auction.   This posting of collateral will charge everyone transaction fees and those that reduce their collateral afterward will pay 2x the fees.      This would be mere pennies. 

If the market is functioning properly you will see very few settlement requests (the 24+ hour delay means you cannot use settlement to "buy the bottom" of a flash crash with huge volume) and those that want the money NOW will just sell on the normal market.   There would be little incentive to pay interest to avoid a settlement that never happens.

 
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Offline lastagile

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Re: BitAssets 3.0 - For Community Review
« Reply #101 on: April 24, 2015, 03:26:45 pm »
This is not fair for shorter, and the system will not work!!!! Because people hold BITUSD can get BTS back at any time, will not market impact no matter how big the volume the settlement is.
If I'm a whale and holding a lot of BTS. And I want get more.
What I need to do is keep buy the BITUSD, and drive the BITUSD price up. The more BITUSD I buy, the more expensive BITUSD is, and the less BITUSD can be created with same mount of BTS.   This will keep moving the BITUSD price raise. And at some moment when succeed drive the BITUSD price up for more than x hours, I can request an settlement with only 1% lost, and I will not move the market at all, no mater how big volume I settled.
This is crazy.

The market will be completely controlled by whales.

The problem here is settlement will have a market impact. This is not a free market!

How do u think about this?

Offline bytemaster

Re: BitAssets 3.0 - For Community Review
« Reply #102 on: April 24, 2015, 04:25:21 pm »
This is not fair for shorter, and the system will not work!!!! Because people hold BITUSD can get BTS back at any time, will not market impact no matter how big the volume the settlement is.
If I'm a whale and holding a lot of BTS. And I want get more.
What I need to do is keep buy the BITUSD, and drive the BITUSD price up. The more BITUSD I buy, the more expensive BITUSD is, and the less BITUSD can be created with same mount of BTS.   This will keep moving the BITUSD price raise. And at some moment when succeed drive the BITUSD price up for more than x hours, I can request an settlement with only 1% lost, and I will not move the market at all, no mater how big volume I settled.
This is crazy.

The market will be completely controlled by whales.

The problem here is settlement will have a market impact. This is not a free market!

How do u think about this?

Not at any time, but at the price feed (not easily manipulated) and after 24+ hours (allowing the market time to correct from your attempted manipulation).

If you keep buying BitUSD further from the peg without real demand for BTS in the outside market then you will pay a high price without moving the feed.  If you force settlement you will lose money.  If you can control the outside price of all BTS then that *IS* the market price and you should speculate accordingly.   Fortunately the only way to harm shorts is to buy BitUSD... dump BTS on external markets... for them to settle at a loss.   But this is real market action and fair.  If you have enough BTS to push the price down by 1% in 24 hours then you signaled your move when you purchased BitUSD above market and again when you requested settlement which would likely cause the market to fall before you can sell your BTS.  Your gains on the BitUSD side would be offset by your losses on the BTS side.   Any way you slice it there are no guaranteed profits and every move you make is a PRICE SIGNAL and a valid price signal.   Buying BitUSD == Selling BTS
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Offline lastagile

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Re: BitAssets 3.0 - For Community Review
« Reply #103 on: April 24, 2015, 05:04:36 pm »

Fortunately the only way to harm shorts is to buy BitUSD... dump BTS on external markets... for them to settle at a loss.   
Agree

But this is real market action and fair.
Not agree.
What I need to do is:
1. Keeping dump BTS in external market, at the same time buy BitUSD in internal market. This will cause the BTS price fall. (I'm a whale, and have enough BTS)
2. After the price is down  more than 5%(just a example) after 24 hours. I require a settlement in internal market, this will not make BTS price up (no market impact in settlement but only 1% price gap). I will get more BTS than before I buy BitUSD.
3. Buy BTS in external market, (maybe loss a bit BTS compared to before I sell BTS).

The chance is very big that the BTS I earned in step 2 is more than what I lost in step 3. Because In step 2 I will make no market impact with only 1% price gap. In step3 as the BTS price is already drag down by myself, I can buy cheap BTS, even if the price raise when I buy BTS back.  It is likely the price will not raise to the price before Step 1.

   If you have enough BTS to push the price down by 1% in 24 hours then you signaled your move when you purchased BitUSD above market and again when you requested settlement which would likely cause the market to fall before you can sell your BTS.  Your gains on the BitUSD side would be offset by your losses on the BTS side.
Did not get you. why the settlement will cause the market to fall  Why I want to sell my BTS?

Offline xiahui135

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Re: BitAssets 3.0 - For Community Review
« Reply #104 on: April 25, 2015, 12:20:52 am »
It seems people have to sell bts for bitasset, but they need not to buy bts when they need bts. So the market will face sell presure, but no buy presure. This will drive the bts price all way down. Correct me, if i misunderstand something.