Author Topic: BitShares X Status Update  (Read 198027 times)

0 Members and 1 Guest are viewing this topic.

Offline bytemaster

Do asset holders still get dividends from BTS backing them? How do you deal with fees in different assets?

When I moved to implementing dividends by simply destroying the coins rather than managing micro payments I was no longer able to redirect dividends to bitassets.   At this point in time I suggested switching to a hard coded 5%...  Then there was the debate on whether the 5% meant anything other than a constant offset.   I am going to start with 0% in the first chain for simplicity, then experiment with alternatives by implementing the interest rate later.   Less things to go wrong in the initial release.

In the case of BitAssets they still require fees to be paid in BTS when they are transferred.  When trading on the market some of the bitassets are kept as fees.   This destroys the BitAssets and thus serves as a kind of dividend on bitassets. 


For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline toast

  • Hero Member
  • *****
  • Posts: 4001
    • View Profile
  • BitShares: nikolai
Do asset holders still get dividends from BTS backing them? How do you deal with fees in different assets?
Do not use this post as information for making any important decisions. The only agreements I ever make are informal and non-binding. Take the same precautions as when dealing with a compromised account, scammer, sockpuppet, etc.

Offline crazybit


then does it mean such short position will never been covered if the user does not add margin?

It means the losses are eaten by the network rather than the short position.  The network earns the BitUSD necessary to cover these losses from transaction fees and in most cases accumulates a reasonable buffer prior to the event. 

When a short positions runs out of collateral the network simply discards it as no rational actor would bother to pay additional losses. 

Of course everyone trading must be aware of the assumptions baked into the blockchain prior to investing:

1) Rapid loss of value of 50% in hours is very rare, even for bitcoin (once the network is established)... can anyone show an example where Bitcoin lost 50% in hours (excluding the Mt. Gox flash crash)?

2) A loss of 50% is still break-even for the network, assuming everyone was fully collateralized before the 50% drop.

3) The most likely scenario for a 50% drop is after a large increase (bubble) which should be less likely given most shorts would use a BTS bubble as a covering opportunity (suppressing the bubble in the first place).  The demand for BitUSD will increase as the bubble grows which keeps the bubble in check.  Remember, BitUSD is the 'short' position against BTS.

4) The rise in value of BTS means that the collateral backing all existing BitUSD went up in value dramatically and thus a 50% fall is unlikely to even consume all of the collateral except for anyone who shorted BitUSD at the top of the BTS bubble.  Few people would want to open a leverage position after such a massive run up and thus the amount of BitUSD that would lack sufficient margin to cover would be relatively small.

5) The worst case 50% fall that results in insufficient collateral would have to occur at a time when there was no recent run up and thus be triggered by something other than a bubble collapse.   This would be like Bitcoin losing 50% of its value in an hour after having price stability for months.   Possible trigger events include: finding a bug in the blockchain, shutdown of the internet, or some regulatory action.  During such an event, perhaps after a long-slow fall in BTS value it is possible for many positions to start out with some loss and thus require less than 50% immediate drop to trigger an insufficient funds scenario.

6) The holder of BitUSD is not protected against systemic risks associated with all crypoto-currencies, only from the volatility that is independent of those systemic risks.   


So what is the economic effect of having some shorts blow out and thus leaving more BitUSD in circulation than short positions that need covering?     A fall in the value of BitUSD relative to BTS proportional to the unbacked BitUSD in existence.  What is the economic effect of having some BitUSD destroyed by transaction fees?  A rise in the value of BitUSD relative to BTS proportional to transaction fees destroyed.

However I believe that these supply driven theories of value will only play a part on the fringe / extreme cases and that the global consensus that BitUSD should be traded at a price point near real USD will have a far greater impact on the demand side of the equation.

Lastly I would like to make one last observation, large market moves that result in significant un-collateralized BitUSD will result in one-time devaluation of BitUSD.... but this one time devaluation would simply create a new constant offset from BitUSD and the market will continue to operate with very high correlation to real USD.  In other words, BitUSD is useful as an investment vehicle due to its correlation and not its price.   What we are pegging is the correlation and not the price.

Thus those long BitUSD have an insurance policy against BTS price drops with a maximum payout of 2x.  They bear all risk beyond 2x.
thank you very much for your further clarification!!!


Sent from my iPhone using Tapatalk

Offline CLains

  • Hero Member
  • *****
  • Posts: 2606
    • View Profile
  • BitShares: clains
1) Rapid loss of value of 50% in hours is very rare, even for bitcoin (once the network is established)... can anyone show an example where Bitcoin lost 50% in hours (excluding the Mt. Gox flash crash)?

I'm still crying for lack of buyorder @BTC-e today.

The holder of BitUSD is not protected against systemic risks associated with all crypoto-currencies, only from the volatility that is independent of those systemic risks.   

+3%

Offline bytemaster

then does it mean such short position will never been covered if the user does not add margin?

It means the losses are eaten by the network rather than the short position.  The network earns the BitUSD necessary to cover these losses from transaction fees and in most cases accumulates a reasonable buffer prior to the event. 

When a short positions runs out of collateral the network simply discards it as no rational actor would bother to pay additional losses. 

Of course everyone trading must be aware of the assumptions baked into the blockchain prior to investing:

1) Rapid loss of value of 50% in hours is very rare, even for bitcoin (once the network is established)... can anyone show an example where Bitcoin lost 50% in hours (excluding the Mt. Gox flash crash)?

2) A loss of 50% is still break-even for the network, assuming everyone was fully collateralized before the 50% drop.

3) The most likely scenario for a 50% drop is after a large increase (bubble) which should be less likely given most shorts would use a BTS bubble as a covering opportunity (suppressing the bubble in the first place).  The demand for BitUSD will increase as the bubble grows which keeps the bubble in check.  Remember, BitUSD is the 'short' position against BTS.

4) The rise in value of BTS means that the collateral backing all existing BitUSD went up in value dramatically and thus a 50% fall is unlikely to even consume all of the collateral except for anyone who shorted BitUSD at the top of the BTS bubble.  Few people would want to open a leverage position after such a massive run up and thus the amount of BitUSD that would lack sufficient margin to cover would be relatively small.

5) The worst case 50% fall that results in insufficient collateral would have to occur at a time when there was no recent run up and thus be triggered by something other than a bubble collapse.   This would be like Bitcoin losing 50% of its value in an hour after having price stability for months.   Possible trigger events include: finding a bug in the blockchain, shutdown of the internet, or some regulatory action.  During such an event, perhaps after a long-slow fall in BTS value it is possible for many positions to start out with some loss and thus require less than 50% immediate drop to trigger an insufficient funds scenario.

6) The holder of BitUSD is not protected against systemic risks associated with all crypoto-currencies, only from the volatility that is independent of those systemic risks.   


So what is the economic effect of having some shorts blow out and thus leaving more BitUSD in circulation than short positions that need covering?     A fall in the value of BitUSD relative to BTS proportional to the unbacked BitUSD in existence.  What is the economic effect of having some BitUSD destroyed by transaction fees?  A rise in the value of BitUSD relative to BTS proportional to transaction fees destroyed.

However I believe that these supply driven theories of value will only play a part on the fringe / extreme cases and that the global consensus that BitUSD should be traded at a price point near real USD will have a far greater impact on the demand side of the equation.

Lastly I would like to make one last observation, large market moves that result in significant un-collateralized BitUSD will result in one-time devaluation of BitUSD.... but this one time devaluation would simply create a new constant offset from BitUSD and the market will continue to operate with very high correlation to real USD.  In other words, BitUSD is useful as an investment vehicle due to its correlation and not its price.   What we are pegging is the correlation and not the price.

Thus those long BitUSD have an insurance policy against BTS price drops with a maximum payout of 2x.  They bear all risk beyond 2x. 


For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline crazybit

then does it mean such short position will never been covered if the user does not add margin?
« Last Edit: February 10, 2014, 02:59:47 pm by CrazyBit »

Offline bytemaster


According to the exiting margin call algorithm,if the bid price is much lower than the highest call price after matching the normal market order,is it possible that even the collateral BTS has been used up, but still can not cover the short position?
Quote
                       {
                           // consume the full call, leave change in the bid
                            auto cover_amount = payoff * call_price;
                            working_call.amount -= cover_amount; // is it possible the working_call.amount<=0
                            loan_amount         += payoff;
                            collateral_amount   += cover_amount + cover_amount;
                            working_bid.amount  -= cover_amount;

                            market_trx.inputs.push_back( call_itr->location );
                            if( working_call.amount.get_rounded_amount() > 0 )
                            {
                               // TODO.. charge a 5% fee
                               market_trx.outputs.push_back(
                                                   trx_output( claim_by_signature_output( cover_claim.owner ), working_call.amount ) );
                            }
                            ++call_itr;
                            if( call_itr != margin_positions.end() )
                            {
                               working_call = get_output( call_itr->location );
                               cover_claim  = working_call.as<claim_by_cover_output>();
                            }
                         }

Yes.  It is possible for extreme market moves to leave some bit usd unbacked.  These moves would have to be very quick (less than 1 hr) and very large ( greater than 50%) fall in value of bts. 

However I believe that this will not break the peg because the network itself captures and destroys bit usd as part of normal trx fees.   This lost bitusd puts upward pressure on the price of bitusd like someone holding infinite demand for this bitusd.  Essentially there is never enough bitusd to cover all short positions and this provides some insurance against the times when there is not enough collateral to cover a short.

What this means effectively is that as long as you do not attempt to transact during a transient the peg will hold. 




Sent from my iPhone using Tapatalk
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline crazybit

According to the exiting margin call algorithm,if the bid price is much lower than the highest call price after matching the normal market order,is it possible that even the collateral BTS has been used up, but still can not cover the short position?
Quote
                       {
                           // consume the full call, leave change in the bid
                            auto cover_amount = payoff * call_price;
                            working_call.amount -= cover_amount; // is it possible the working_call.amount<=0
                            loan_amount         += payoff;
                            collateral_amount   += cover_amount + cover_amount;
                            working_bid.amount  -= cover_amount;

                            market_trx.inputs.push_back( call_itr->location );
                            if( working_call.amount.get_rounded_amount() > 0 )
                            {
                               // TODO.. charge a 5% fee
                               market_trx.outputs.push_back(
                                                   trx_output( claim_by_signature_output( cover_claim.owner ), working_call.amount ) );
                            }
                            ++call_itr;
                            if( call_itr != margin_positions.end() )
                            {
                               working_call = get_output( call_itr->location );
                               cover_claim  = working_call.as<claim_by_cover_output>();
                            }
                         }
« Last Edit: February 10, 2014, 12:46:13 pm by CrazyBit »

Offline santaclause102

  • Hero Member
  • *****
  • Posts: 2486
    • View Profile
Unfortunately today I spent on the phone with just about everyone on the team and thus didn't have any opportunity to write code.   I will be spending time with my kids this weekend so there will be little progress for the next 2 days.


Am I wrong to assume that bytemaster is the only person working on this project? If this is the case, why?

He is the main programer for btsx .

I understand that much. Question is: Is he the only programmer on btsx?

Arlen started 1 week ago and his first task is to help organize and hire more developers.  He has made great progress and we now have several people that are working on BitShares X on a trial per-task basis prior to committing to hiring full time.

why not make another more official announcement that i3 is looking for developers on btt. I made one for the bounties but that sounded less official than if you or stan or someone would do it... I mean an announcement less associated with the bounties but more with a long term engagement...


Offline bytemaster

Unfortunately today I spent on the phone with just about everyone on the team and thus didn't have any opportunity to write code.   I will be spending time with my kids this weekend so there will be little progress for the next 2 days.


Am I wrong to assume that bytemaster is the only person working on this project? If this is the case, why?

He is the main programer for btsx .

I understand that much. Question is: Is he the only programmer on btsx?

Arlen started 1 week ago and his first task is to help organize and hire more developers.  He has made great progress and we now have several people that are working on BitShares X on a trial per-task basis prior to committing to hiring full time.   

For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline bitcoinerS

  • Hero Member
  • *****
  • Posts: 592
    • View Profile
Unfortunately today I spent on the phone with just about everyone on the team and thus didn't have any opportunity to write code.   I will be spending time with my kids this weekend so there will be little progress for the next 2 days.


Am I wrong to assume that bytemaster is the only person working on this project? If this is the case, why?

He is the main programer for btsx .

I understand that much. Question is: Is he the only programmer on btsx?
>>> approve bitcoiners

Offline sfinder

  • Hero Member
  • *****
  • Posts: 1205
  • 4 Cores CPU+100GB SSD+anti-DDoS Pro
    • View Profile
Unfortunately today I spent on the phone with just about everyone on the team and thus didn't have any opportunity to write code.   I will be spending time with my kids this weekend so there will be little progress for the next 2 days.


Am I wrong to assume that bytemaster is the only person working on this project? If this is the case, why?

He is the main programer for btsx .
微博:星在飘我在找|BTS X 受托人delegate ID:baidu
中国教育书店合作将20%收入捐献给贫困山区学生。
Cooperating with China Education Bookstore and will donate 20% of delegate income to the poor students

Offline Stan

  • Hero Member
  • *****
  • Posts: 2908
  • You need to think BIGGER, Pinky...
    • View Profile
    • Cryptonomex
  • BitShares: Stan
Anything said on these forums does not constitute an intent to create a legal obligation or contract of any kind.   These are merely my opinions which I reserve the right to change at any time.

Offline bitcoinerS

  • Hero Member
  • *****
  • Posts: 592
    • View Profile
Unfortunately today I spent on the phone with just about everyone on the team and thus didn't have any opportunity to write code.   I will be spending time with my kids this weekend so there will be little progress for the next 2 days.


Am I wrong to assume that bytemaster is the only person working on this project? If this is the case, why?
>>> approve bitcoiners

Offline sfinder

  • Hero Member
  • *****
  • Posts: 1205
  • 4 Cores CPU+100GB SSD+anti-DDoS Pro
    • View Profile
Hi bytemaster, need to speed up now. competitor Counterparty(XCP) has published its trading platform client for more than a month but we still do not have a barely working version client for  BTSX.
https://bitcointalk.org/index.php?topic=395761.0
微博:星在飘我在找|BTS X 受托人delegate ID:baidu
中国教育书店合作将20%收入捐献给贫困山区学生。
Cooperating with China Education Bookstore and will donate 20% of delegate income to the poor students