my plan to adjust SQP

[Xeldal]

I didn't know SQP was going to be removed; but I did know that margin calls will only be triggered if the feed crosses your margin call limit:
https://github.com/cryptonomex/graphene/issues/436
https://github.com/cryptonomex/graphene/compare/436-fork-feed-protect

You're correct.  That's what I understood as well.  Similar to how it used to work.  We never called it SQP before this current set of rules, so I guess that's why I mistakenly say its going away.   

[maqifrnswa]

Benefit: Margin calls should be avoided unless absolutely necessary since it takes smartcoins out of circulation when the market is too thin to begin with. The most accurate/liquid market should be used to establish when a market call occurs, and at this moment the feed is a best. Feed is 100% SQP.

If you want to avoid margin calls, why not just reduce the margin call limit?  Instead of triggering at 175% collateralization, trigger at 150% or lower.

Its my understanding that SQP is on its way out, so perhaps we shouldn't be designing around it.  But in any event I think this SQP limit should not be reduced to 1000.  If smartcoins are designed to trade at a premium,  selling the smartcoin at the feed is the worst deal you should ever expect to get.  Margin call orders, as they approach <100% collateralization are the most urgently needed to fill.   You don't put the most urgent need at the least desirable price.  It may never get filled. 

I'd suggested elsewhere having margin call only trigger if the feed crosses your limit. Like BTS-0.9  Only then would it reach out and try to fill the order, but it's restricted by a limit, again like BTS-0.9  ;  As the feed moves beyond your margin call limit, the urgency to fill the order is greater.  The limit could start at 0% of the feed once triggered, and slowly extend out, up to 10% or more as it approaches black swan <100% collateralization.

I deleted my post after thinking a bit more, sorry for the noise. (I was hoping it would be deleted before anyone saw it!)

I agree with you that SQP shouldn't be used to avoid margin calls. It also shouldn't be 100% for the reason you give: those calls urgently need to be filled, and they won't at 100% SQP.

I didn't know SQP was going to be removed; but I did know that margin calls will only be triggered if the feed crosses your margin call limit:
https://github.com/cryptonomex/graphene/issues/436
https://github.com/cryptonomex/graphene/compare/436-fork-feed-protect

Even with this change you probably need some SQP to protect shorts and prevent margin calls from accidentally triggering a blackswan in a thin market.

Given that margin calls will only be triggered if the feed crosses your margin limit:
--In a normal market where bid/ask is within 10% of the feed (see current bitUSD:BTS), SQP doesn't really do much except protect shorts from being "ripped off." Shorts see this as a penalty, but the bitUSD has to come from somewhere and SQP limits how big the penalty will be. In a liquid market, you shouldn't even need SQP as there should be enough for sale at market rates. SQP can't be 0, because they have to be cleared from somewhere otherwise margin calls and collateral are meaningless.

--In a broken market where bid/ask is greater than 10% from the feed (see current bitBTC:BTS), SQP creates an invisible buy wall that slows the market from converging to the peg. Someone's going to have to bite the bullet and short to clear out all the margin calls, otherwise price will linger at feed+10%.

SQP also helps me price risk - if the biggest penalty I can pay is 10%, I know that anything I short greater than 10% should be immune to risk associated with bitASSET:ASSET spread.

[Xeldal]

Benefit: Margin calls should be avoided unless absolutely necessary since it takes smartcoins out of circulation when the market is too thin to begin with. The most accurate/liquid market should be used to establish when a market call occurs, and at this moment the feed is a best. Feed is 100% SQP.

If you want to avoid margin calls, why not just reduce the margin call limit?  Instead of triggering at 175% collateralization, trigger at 150% or lower.

Its my understanding that SQP is on its way out, so perhaps we shouldn't be designing around it.  But in any event I think this SQP limit should not be reduced to 1000.  If smartcoins are designed to trade at a premium,  selling the smartcoin at the feed is the worst deal you should ever expect to get.  Margin call orders, as they approach <100% collateralization are the most urgently needed to fill.   You don't put the most urgent need at the least desirable price.  It may never get filled. 

I'd suggested elsewhere having margin call only trigger if the feed crosses your limit. Like BTS-0.9  Only then would it reach out and try to fill the order, but it's restricted by a limit, again like BTS-0.9  ;  As the feed moves beyond your margin call limit, the urgency to fill the order is greater.  The limit could start at 0% of the feed once triggered, and slowly extend out, up to 10% or more as it approaches black swan <100% collateralization. 

[abit]

He asked a valid question .. getting personal is not helpful

Please don't dig a tomb (don't reply to a too old post)   

[xeroc]

yes you are wrong - as in "it is not up to you to decide who is running a real business". And I might be wrong but real businesses do not complain for losing 20 BTS.

Who's lost 20 BTS, who is complaining, and what does this have to do with this thread on SQP?   I think Transwiser is running a real CNY gateway business and I'm sure people there lost a lot more than 20BTS.  Who said it was ever my decision to decide what is a real business?...

How exactly did they lose more than 20 BTS?

I don't know what the exact amount is, but ask JohnnyBitcoin.  He was one of the ones using the force settlement so he can probably give you an estimate.   

I have not used the forced settlement but I can give an exact number on their losses [due to the settlement]

Zero!


PS
Now, there is only one person that knows about exactly who made what and how much in the whole settlement fiasco, but it is not me. For that info you should ask scotter.
I do not know if he will ever  speak, but I will be all ears if he does.

settlement's loss is zero? the loss is very complex, not a simple math question.
for example, transwiser borrow 100bitCNY, sell it to others for 100.2 CNY.
then somebody ask force settle at price 0.02CNY/BTS, transwiser get 100bitCNY, lost 5000 BTS.
how many loss or profit do you think it is?

may I ask you if you agree I can sell or buy all your BTS at latest market price anytime?
if you don't agree, the shorter's also don't want to accept this rule, so nobody will short if they all know what situation they have to  face.

No this not a math problem, it is a simple question - How much were the exact losses of transwise before they lied to the committee members, claiming huge losses so they can change the system to their liking?

I don't know if you are really stupid or pretend to be stupid.

He asked a valid question .. getting personal is not helpful

[alt]

yes you are wrong - as in "it is not up to you to decide who is running a real business". And I might be wrong but real businesses do not complain for losing 20 BTS.

Who's lost 20 BTS, who is complaining, and what does this have to do with this thread on SQP?   I think Transwiser is running a real CNY gateway business and I'm sure people there lost a lot more than 20BTS.  Who said it was ever my decision to decide what is a real business?...

How exactly did they lose more than 20 BTS?

I don't know what the exact amount is, but ask JohnnyBitcoin.  He was one of the ones using the force settlement so he can probably give you an estimate.   

I have not used the forced settlement but I can give an exact number on their losses [due to the settlement]

Zero!


PS
Now, there is only one person that knows about exactly who made what and how much in the whole settlement fiasco, but it is not me. For that info you should ask scotter.
I do not know if he will ever  speak, but I will be all ears if he does.

settlement's loss is zero? the loss is very complex, not a simple math question.
for example, transwiser borrow 100bitCNY, sell it to others for 100.2 CNY.
then somebody ask force settle at price 0.02CNY/BTS, transwiser get 100bitCNY, lost 5000 BTS.
how many loss or profit do you think it is?

may I ask you if you agree I can sell or buy all your BTS at latest market price anytime?
if you don't agree, the shorter's also don't want to accept this rule, so nobody will short if they all know what situation they have to  face.

No this not a math problem, it is a simple question - How much were the exact losses of transwise before they lied to the committee members, claiming huge losses so they can change the system to their liking?

I don't know if you are really stupid or pretend to be stupid.

[abit]

you still think it as a math problem. the problem is you never can give a fair price for Bts, and change others Bts with this price.
you can give a price at a moment, but the price always change, so nobody can accept the rule: you can buy all of my Bts at any time you want

settlement's loss is zero? the loss is very complex, not a simple math question.
for example, transwiser borrow 100bitCNY, sell it to others for 100.2 CNY.
then somebody ask force settle at price 0.02CNY/BTS, transwiser get 100bitCNY, lost 5000 BTS.
how many loss or profit do you think it is?

In this case transwiser got 100.2 CNY in fiat, and he paid out 5000 BTS, and the borrowed 100 bitCNY is returned to the system. How much loss or profit do you think it is?
Although I don't think current design is better than which of 0.9, but "borrowed things should have some ways to be forced returned".

//Edit:
True he has lost much if the short position is created when price of bts was much higher. But if he buy bts with the 100 CNY in fiat from external exchange, the actual lost would be not too much.

[tonyk]

yes you are wrong - as in "it is not up to you to decide who is running a real business". And I might be wrong but real businesses do not complain for losing 20 BTS.

Who's lost 20 BTS, who is complaining, and what does this have to do with this thread on SQP?   I think Transwiser is running a real CNY gateway business and I'm sure people there lost a lot more than 20BTS.  Who said it was ever my decision to decide what is a real business?...

How exactly did they lose more than 20 BTS?

I don't know what the exact amount is, but ask JohnnyBitcoin.  He was one of the ones using the force settlement so he can probably give you an estimate.   

I have not used the forced settlement but I can give an exact number on their losses [due to the settlement]

Zero!


PS
Now, there is only one person that knows about exactly who made what and how much in the whole settlement fiasco, but it is not me. For that info you should ask scotter.
I do not know if he will ever  speak, but I will be all ears if he does.

settlement's loss is zero? the loss is very complex, not a simple math question.
for example, transwiser borrow 100bitCNY, sell it to others for 100.2 CNY.
then somebody ask force settle at price 0.02CNY/BTS, transwiser get 100bitCNY, lost 5000 BTS.
how many loss or profit do you think it is?

may I ask you if you agree I can sell or buy all your BTS at latest market price anytime?
if you don't agree, the shorter's also don't want to accept this rule, so nobody will short if they all know what situation they have to  face.

No this not a math problem, it is a simple question - How much were the exact losses of transwise before they lied to the committee members, claiming huge losses so they can change the system to their liking?

[alt]

you still think it as a math problem. the problem is you never can give a fair price for Bts, and change others Bts with this price.
you can give a price at a moment, but the price always change, so nobody can accept the rule: you can buy all of my Bts at any time you want

[pc]

I fully understand it's for those with 'insufficient' collateral, but did you understand my post about walking the book down in an illiquid market and why it's more likely to prevent a black swan than cause it?   

That's essentially impossible IMO, because you'd have to walk the book down in *all* markets to generate a significant impact on the price feed, and if you're that powerful the market is in your hands anyway.

Why all markets?  Am I missing something?  Black swans are based on internal market trading, not the price feed, is it not?  I'll admit I'm wrong if I'm misunderstanding how this market works.  The price feed is only used for the SQP [aka BSP (black swan protection)] is it not?

Erm. I *think* black swans are based on the price feed, not the internal market price. I'm not sure either, but if margin calls happen due to the price feed it seems logical to assume that the collateral ratio of short positions is always compared to the price feed.

for example, transwiser borrow 100bitCNY, sell it to others for 100.2 CNY.
then somebody ask force settle at price 0.02CNY/BTS, transwiser get 100bitCNY, lost 5000 BTS.
how many loss or profit do you think it is?

In that case the loss is due to the price change, not due to forced settlement.

[alt]

yes you are wrong - as in "it is not up to you to decide who is running a real business". And I might be wrong but real businesses do not complain for losing 20 BTS.

Who's lost 20 BTS, who is complaining, and what does this have to do with this thread on SQP?   I think Transwiser is running a real CNY gateway business and I'm sure people there lost a lot more than 20BTS.  Who said it was ever my decision to decide what is a real business?...

How exactly did they lose more than 20 BTS?

I don't know what the exact amount is, but ask JohnnyBitcoin.  He was one of the ones using the force settlement so he can probably give you an estimate.   

I have not used the forced settlement but I can give an exact number on their losses [due to the settlement]

Zero!


PS
Now, there is only one person that knows about exactly who made what and how much in the whole settlement fiasco, but it is not me. For that info you should ask scotter.
I do not know if he will ever  speak, but I will be all ears if he does.

settlement's loss is zero? the loss is very complex, not a simple math question.
for example, transwiser borrow 100bitCNY, sell it to others for 100.2 CNY.
then somebody ask force settle at price 0.02CNY/BTS, transwiser get 100bitCNY, lost 5000 BTS.
how many loss or profit do you think it is?

may I ask you if you agree I can sell or buy all your BTS at latest market price anytime?
if you don't agree, the shorter's also don't want to accept this rule, so nobody will short if they all know what situation they have to  face.

[tonyk]

yes you are wrong - as in "it is not up to you to decide who is running a real business". And I might be wrong but real businesses do not complain for losing 20 BTS.

Who's lost 20 BTS, who is complaining, and what does this have to do with this thread on SQP?   I think Transwiser is running a real CNY gateway business and I'm sure people there lost a lot more than 20BTS.  Who said it was ever my decision to decide what is a real business?...

How exactly did they lose more than 20 BTS?

I don't know what the exact amount is, but ask JohnnyBitcoin.  He was one of the ones using the force settlement so he can probably give you an estimate.   

I have not used the forced settlement but I can give an exact number on their losses [due to the settlement]

Zero!


PS
Now, there is only one person that knows about exactly who made what and how much in the whole settlement fiasco, but it is not me. For that info you should ask scotter.
I do not know if he will ever  speak, but I will be all ears if he does.

[merivercap]

yes you are wrong - as in "it is not up to you to decide who is running a real business". And I might be wrong but real businesses do not complain for losing 20 BTS.

Who's lost 20 BTS, who is complaining, and what does this have to do with this thread on SQP?   I think Transwiser is running a real CNY gateway business and I'm sure people there lost a lot more than 20BTS.  Who said it was ever my decision to decide what is a real business?...

How exactly did they lose more than 20 BTS?

I don't know what the exact amount is, but ask JohnnyBitcoin.  He was one of the ones using the force settlement so he can probably give you an estimate.   

[tonyk]

yes you are wrong - as in "it is not up to you to decide who is running a real business". And I might be wrong but real businesses do not complain for losing 20 BTS.

Who's lost 20 BTS, who is complaining, and what does this have to do with this thread on SQP?   I think Transwiser is running a real CNY gateway business and I'm sure people there lost a lot more than 20BTS.  Who said it was ever my decision to decide what is a real business?...

How exactly did they lose more than 20 BTS?

[merivercap]

I fully understand it's for those with 'insufficient' collateral, but did you understand my post about walking the book down in an illiquid market and why it's more likely to prevent a black swan than cause it?   

That's essentially impossible IMO, because you'd have to walk the book down in *all* markets to generate a significant impact on the price feed, and if you're that powerful the market is in your hands anyway.

Why all markets?  Am I missing something?  Black swans are based on internal market trading, not the price feed, is it not?  I'll admit I'm wrong if I'm misunderstanding how this market works.  The price feed is only used for the SQP [aka BSP (black swan protection)] is it not?

[In the equation: SWAN = DEBT/COLLATERAL
https://bitsharestalk.org/index.php/topic,19102.0.html

Both DEBT & COLLATERAL are based on internal market prices correct?]

I checked the market depth on the openledger books and a 430,000 BTS sell order ($1290) gets the market down from .003 USD/BTS to .002 USD/BTS.. if my math is right it only takes $1,290 to bring the internal markets down 33%?  And there is no support after that so it will go to zero USD/BTS if no one else comes in the very second a big sell order is placed.

I'm actually hoping I'm missing something, because I'm doing this analysis on the fly and the more I find out the more problems I see with this illiquidity....

IDK, shouldn't you have found this first before having strong opinions in the other thread? ...to say nothing about this one.

I have an opinion and I'm asking mainly rhetorically, but I hold out that I could be wrong and if so sometimes it's easier for someone to point it out.

yes you are wrong - as in "it is not up to you to decide who is running a real business". And I might be wrong but real businesses do not complain for losing 20 BTS.

Who's lost 20 BTS, who is complaining, and what does this have to do with this thread on SQP?   I think Transwiser is running a real CNY gateway business and I'm sure people there lost a lot more than 20BTS.  Who said it was ever my decision to decide what is a real business?... I have my own definition of what a real business is and it's probably more in line with what others think... didn't mean to offend anyone, but hey if someone is a full time trader I'd include them too in my definition,  but I doubt there are many here...most are probably part-time speculators ...

[tonyk]

I fully understand it's for those with 'insufficient' collateral, but did you understand my post about walking the book down in an illiquid market and why it's more likely to prevent a black swan than cause it?   

That's essentially impossible IMO, because you'd have to walk the book down in *all* markets to generate a significant impact on the price feed, and if you're that powerful the market is in your hands anyway.

Why all markets?  Am I missing something?  Black swans are based on internal market trading, not the price feed, is it not?  I'll admit I'm wrong if I'm misunderstanding how this market works.  The price feed is only used for the SQP [aka BSP (black swan protection)] is it not?

[In the equation: SWAN = DEBT/COLLATERAL
https://bitsharestalk.org/index.php/topic,19102.0.html

Both DEBT & COLLATERAL are based on internal market prices correct?]

I checked the market depth on the openledger books and a 430,000 BTS sell order ($1290) gets the market down from .003 USD/BTS to .002 USD/BTS.. if my math is right it only takes $1,290 to bring the internal markets down 33%?  And there is no support after that so it will go to zero USD/BTS if no one else comes in the very second a big sell order is placed.

I'm actually hoping I'm missing something, because I'm doing this analysis on the fly and the more I find out the more problems I see with this illiquidity....

IDK, shouldn't you have found this first before having strong opinions in the other thread? ...to say nothing about this one.

I have an opinion and I'm asking mainly rhetorically, but I hold out that I could be wrong and if so sometimes it's easier for someone to point it out.

yes you are wrong - as in "it is not up to you to decide who is running a real business". And I might be wrong but real businesses do not complain for losing 20 BTS.

[merivercap]

I fully understand it's for those with 'insufficient' collateral, but did you understand my post about walking the book down in an illiquid market and why it's more likely to prevent a black swan than cause it?   

That's essentially impossible IMO, because you'd have to walk the book down in *all* markets to generate a significant impact on the price feed, and if you're that powerful the market is in your hands anyway.

Why all markets?  Am I missing something?  Black swans are based on internal market trading, not the price feed, is it not?  I'll admit I'm wrong if I'm misunderstanding how this market works.  The price feed is only used for the SQP [aka BSP (black swan protection)] is it not?

[In the equation: SWAN = DEBT/COLLATERAL
https://bitsharestalk.org/index.php/topic,19102.0.html

Both DEBT & COLLATERAL are based on internal market prices correct?]

I checked the market depth on the openledger books and a 430,000 BTS sell order ($1290) gets the market down from .003 USD/BTS to .002 USD/BTS.. if my math is right it only takes $1,290 to bring the internal markets down 33%?  And there is no support after that so it will go to zero USD/BTS if no one else comes in the very second a big sell order is placed.

I'm actually hoping I'm missing something, because I'm doing this analysis on the fly and the more I find out the more problems I see with this illiquidity....

IDK, shouldn't you have found this first before having strong opinions in the other thread? ...to say nothing about this one.

I have an opinion and I'm asking mainly rhetorically, but I hold out that I could be wrong and if so sometimes it's easier for someone to point it out.

[tonyk]

I fully understand it's for those with 'insufficient' collateral, but did you understand my post about walking the book down in an illiquid market and why it's more likely to prevent a black swan than cause it?   

That's essentially impossible IMO, because you'd have to walk the book down in *all* markets to generate a significant impact on the price feed, and if you're that powerful the market is in your hands anyway.

Why all markets?  Am I missing something?  Black swans are based on internal market trading, not the price feed, is it not?  I'll admit I'm wrong if I'm misunderstanding how this market works.  The price feed is only used for the SQP [aka BSP (black swan protection)] is it not?

[In the equation: SWAN = DEBT/COLLATERAL
https://bitsharestalk.org/index.php/topic,19102.0.html

Both DEBT & COLLATERAL are based on internal market prices correct?]

I checked the market depth on the openledger books and a 430,000 BTS sell order ($1290) gets the market down from .003 USD/BTS to .002 USD/BTS.. if my math is right it only takes $1,290 to bring the internal markets down 33%?  And there is no support after that so it will go to zero USD/BTS if no one else comes in the very second a big sell order is placed.

I'm actually hoping I'm missing something, because I'm doing this analysis on the fly and the more I find out the more problems I see with this illiquidity....

IDK, shouldn't you have found this first before having strong opinions in the other thread? ...to say nothing about this one.

[merivercap]

I fully understand it's for those with 'insufficient' collateral, but did you understand my post about walking the book down in an illiquid market and why it's more likely to prevent a black swan than cause it?   

That's essentially impossible IMO, because you'd have to walk the book down in *all* markets to generate a significant impact on the price feed, and if you're that powerful the market is in your hands anyway.

Why all markets?  Am I missing something?  Black swans are based on internal market trading, not the price feed, is it not?  I'll admit I'm wrong if I'm misunderstanding how this market works.  The price feed is only used for the SQP [aka BSP (black swan protection)] is it not?

[In the equation: SWAN = DEBT/COLLATERAL
https://bitsharestalk.org/index.php/topic,19102.0.html

Both DEBT & COLLATERAL are based on internal market prices correct?]

I checked the market depth on the openledger books and a 430,000 BTS sell order ($1290) gets the market down from .003 USD/BTS to .002 USD/BTS.. if my math is right it only takes $1,290 to bring the internal markets down 33%?  And there is no support after that so it will go to zero USD/BTS if no one else comes in the very second a big sell order is placed.

I'm actually hoping I'm missing something, because I'm doing this analysis on the fly and the more I find out the more problems I see with this illiquidity....

[pc]

Lets stop theorizing about how pegged currencies should be conceived. Nubits is an example that works in practice. Theres no SQP, and theres no forced settlement. These features merely over-complicate the market and discourage the very people we need to make bitassets work.

IMO Nubits is an example that seems to work for a while but still is doomed from the start. I'm sure nobody here would argue that we should invent a BitShares-3.0 that is essentially a Nubits clone.

Bitshares is useless if bitassets don't work. Its really that simple.

I fully agree.

The problem is that there's a lot of theories how bitassets are supposed to work, but so far nobody (including BM) seems to really have nailed it. (That sentence sucks somehow, I hope you get what I mean.)

IMO what's happening here wrt SQP is that some people have entered short positions, fully aware of the risk, and fully aware of the rules, and due to the BTS bear market they're now in the danger of losing money. So they're now complaing and demanding that the rules be changed. That's not only lame, it's outright dangerous because by changing the rules they're putting the whole MPA system at risk.

I fully understand it's for those with 'insufficient' collateral, but did you understand my post about walking the book down in an illiquid market and why it's more likely to prevent a black swan than cause it?   

That's essentially impossible IMO, because you'd have to walk the book down in *all* markets to generate a significant impact on the price feed, and if you're that powerful the market is in your hands anyway.

And you didn't answer why a 10% reduction would be that big a deal for margin overhang. Compare that to the upside where you're going to get much more liquidity in the market, create thinner spreads,  and further lessen the chances of black swans. 

You're playing with numbers. It's not a 10% reduction, it reduces the "punishment" to (near-)zero, which is a 100% reduction.
And the upside you're quoting is obviously purely speculative.

Lastly you seem to be in favor of forced settlement.

No I'm not. I think forced settlements can be used for market manipulation, and I have voiced that opinion when the idea was discussed 6 months ago. But the market manipulation I was afraid of back then has nothing to do with the situation discussed in the other current thread.

[merivercap]

1) The SQP was designed to protect shorts, but in actuality it protects manipulators from ramming down market prices and forcing a black swan.  On occasion I will call the SQP the BSP (Black Swan Protector) as a meme until someone convinces me otherwise.   
2) Isn't the SQP already at 1100 or 10%?  Do you think changing it another 10% is really going to make that much of a difference in creating a black swan?  Really how much of an unmargin-called overhang will we have?  It would be great for someone to calculate it.   Anyways with more liquidity I argue we'll have less of an overhang and thinner spreads.
3) The upside of setting SQP  to 1000 will get you more liquidity.. more shorters...most likely make the premium disappear... make bitUSD & bitShares relevant.... help it become adopted worldwide.  and end world hunger...
4) Buyers are bidding at the SQP so whatever it's set at pegs the price.  When margin calls happen at the price feed, people will trade around the price feed which is great. 
5) Setting the SQP removes the confusion and implicit agreement between shorts and longs about an agreed upon settlement price for the trade.  The whole 'settlement price' is confusing.  Natural settlement should occur at that price feed, not forced settlement.  We should change the SQP and remove forced settlement...

What you're missing is that the SQP is only relevant for shorts with insufficient collateral. These shorts are dangerous and therefore must be removed from the books as quickly as possible. The shorters can escape the effects of the SQP simply by adding more collateral. If they don't - well, you can call it punishment if you like.

I fully understand it's for those with 'insufficient' collateral, but did you understand my post about walking the book down in an illiquid market and why it's more likely to prevent a black swan than cause it?   

And you didn't answer why a 10% reduction would be that big a deal for margin overhang. Compare that to the upside where you're going to get much more liquidity in the market, create thinner spreads,  and further lessen the chances of black swans. 

Lastly you seem to be in favor of forced settlement.  Do you know that it doesn't matter how much collateral you have and you can be force settled?  You'll have a race to be the most collateralized...  do you know what that does to liquidity?  If I have 3x collateral and I'm the least collateralized I may have to go to 4x collateral so I'm not at the bottom.. then the bottom guy will have to go to 5x collateral...  and the race can go so far to have no one creating bitAssets so what is the point? 

[clout]

1) The SQP was designed to protect shorts, but in actuality it protects manipulators from ramming down market prices and forcing a black swan.  On occasion I will call the SQP the BSP (Black Swan Protector) as a meme until someone convinces me otherwise.   
2) Isn't the SQP already at 1100 or 10%?  Do you think changing it another 10% is really going to make that much of a difference in creating a black swan?  Really how much of an unmargin-called overhang will we have?  It would be great for someone to calculate it.   Anyways with more liquidity I argue we'll have less of an overhang and thinner spreads.
3) The upside of setting SQP  to 1000 will get you more liquidity.. more shorters...most likely make the premium disappear... make bitUSD & bitShares relevant.... help it become adopted worldwide.  and end world hunger...
4) Buyers are bidding at the SQP so whatever it's set at pegs the price.  When margin calls happen at the price feed, people will trade around the price feed which is great. 
5) Setting the SQP removes the confusion and implicit agreement between shorts and longs about an agreed upon settlement price for the trade.  The whole 'settlement price' is confusing.  Natural settlement should occur at that price feed, not forced settlement.  We should change the SQP and remove forced settlement...

What you're missing is that the SQP is only relevant for shorts with insufficient collateral. These shorts are dangerous and therefore must be removed from the books as quickly as possible. The shorters can escape the effects of the SQP simply by adding more collateral. If they don't - well, you can call it punishment if you like.

What you are missing is that there is no reason for speculators to get involved in bitshares trading. Its over complicated and too risky. If I want to margin trade I'm just going to do so on Poloniex.

The reason for the higher SQP and forced settlement is to protect against illiquid markets. The problem is that these features only further reduce liquidity. Its a catch 22. You can't protect against illiquid markets and a falling BTS price through software hacks. You have to incentivize liquidity, you have to give confidence to the market. Neither of which is being done.

Lets stop theorizing about how pegged currencies should be conceived. Nubits is an example that works in practice. Theres no SQP, and theres no forced settlement. These features merely over-complicate the market and discourage the very people we need to make bitassets work.

Bitshares is useless if bitassets don't work. Its really that simple.

[pc]

1) The SQP was designed to protect shorts, but in actuality it protects manipulators from ramming down market prices and forcing a black swan.  On occasion I will call the SQP the BSP (Black Swan Protector) as a meme until someone convinces me otherwise.   
2) Isn't the SQP already at 1100 or 10%?  Do you think changing it another 10% is really going to make that much of a difference in creating a black swan?  Really how much of an unmargin-called overhang will we have?  It would be great for someone to calculate it.   Anyways with more liquidity I argue we'll have less of an overhang and thinner spreads.
3) The upside of setting SQP  to 1000 will get you more liquidity.. more shorters...most likely make the premium disappear... make bitUSD & bitShares relevant.... help it become adopted worldwide.  and end world hunger...
4) Buyers are bidding at the SQP so whatever it's set at pegs the price.  When margin calls happen at the price feed, people will trade around the price feed which is great. 
5) Setting the SQP removes the confusion and implicit agreement between shorts and longs about an agreed upon settlement price for the trade.  The whole 'settlement price' is confusing.  Natural settlement should occur at that price feed, not forced settlement.  We should change the SQP and remove forced settlement...

What you're missing is that the SQP is only relevant for shorts with insufficient collateral. These shorts are dangerous and therefore must be removed from the books as quickly as possible. The shorters can escape the effects of the SQP simply by adding more collateral. If they don't - well, you can call it punishment if you like.

[clout]

I don't think we should reduce it past 110 or 10%. I think in reducing it we are reducing the incentive for people to protect the network against a black swan. While I understand this can skew the price of the MPA by 10%, I dont think the problem is the SQP price but the fact that there no one is willing to sell MPA for 10% profit.

The SQP affects only margin calls, so as long as the shorters keep their positions sufficiently collateralized there is no problem.
The purpose of the SQP is to protect the MPA from a black swan. Reducing the SQP increases the likelyhood of a black swan, which would cause serious damage to our ecosystem.
Conclusion: don't reduce the SQP!

@pc @lafona  I listened to the mumble recording, but I wish I could have attended live and spoken up.  I understand the concern about black swans,  but black swans are more likely to occur with less liquidity and without the SQP we may have black swanned already if someone just walked the book enough to trigger it. 

1) The SQP was designed to protect shorts, but in actuality it protects manipulators from ramming down market prices and forcing a black swan.  On occasion I will call the SQP the BSP (Black Swan Protector) as a meme until someone convinces me otherwise.   
2) Isn't the SQP already at 1100 or 10%?  Do you think changing it another 10% is really going to make that much of a difference in creating a black swan?  Really how much of an unmargin-called overhang will we have?  It would be great for someone to calculate it.   Anyways with more liquidity I argue we'll have less of an overhang and thinner spreads.
3) The upside of setting SQP  to 1000 will get you more liquidity.. more shorters...most likely make the premium disappear... make bitUSD & bitShares relevant.... help it become adopted worldwide.  and end world hunger...
4) Buyers are bidding at the SQP so whatever it's set at pegs the price.  When margin calls happen at the price feed, people will trade around the price feed which is great. 
5) Setting the SQP removes the confusion and implicit agreement between shorts and longs about an agreed upon settlement price for the trade.  The whole 'settlement price' is confusing.  Natural settlement should occur at that price feed, not forced settlement.  We should change the SQP and remove forced settlement...

Finally, someone that actually gets that the supposed benefits are far less than the costs. The market worked far better when these features were not added.

[merivercap]

I don't think we should reduce it past 110 or 10%. I think in reducing it we are reducing the incentive for people to protect the network against a black swan. While I understand this can skew the price of the MPA by 10%, I dont think the problem is the SQP price but the fact that there no one is willing to sell MPA for 10% profit.

The SQP affects only margin calls, so as long as the shorters keep their positions sufficiently collateralized there is no problem.
The purpose of the SQP is to protect the MPA from a black swan. Reducing the SQP increases the likelyhood of a black swan, which would cause serious damage to our ecosystem.
Conclusion: don't reduce the SQP!

@pc @lafona  I listened to the mumble recording, but I wish I could have attended live and spoken up.  I understand the concern about black swans,  but black swans are more likely to occur with less liquidity and without the SQP we may have black swanned already if someone just walked the book enough to trigger it. 

1) The SQP was designed to protect shorts, but in actuality it protects manipulators from ramming down market prices and forcing a black swan.  On occasion I will call the SQP the BSP (Black Swan Protector) as a meme until someone convinces me otherwise.   
2) Isn't the SQP already at 1100 or 10%?  Do you think changing it another 10% is really going to make that much of a difference in creating a black swan?  Really how much of an unmargin-called overhang will we have?  It would be great for someone to calculate it.   Anyways with more liquidity I argue we'll have less of an overhang and thinner spreads.
3) The upside of setting SQP  to 1000 will get you more liquidity.. more shorters...most likely make the premium disappear... make bitUSD & bitShares relevant.... help it become adopted worldwide.  and end world hunger...
4) Buyers are bidding at the SQP so whatever it's set at pegs the price.  When margin calls happen at the price feed, people will trade around the price feed which is great. 
5) Setting the SQP removes the confusion and implicit agreement between shorts and longs about an agreed upon settlement price for the trade.  The whole 'settlement price' is confusing.  Natural settlement should occur at that price feed, not forced settlement.  We should change the SQP and remove forced settlement... 

[btstip]

Hey Tuck Fheman, here are the results of your tips...

• tonyk: has been credited 5 PERCENT

Curious about BtsTip? Visit us at http://sharebits.io and start tipping BTS on https://bitsharestalk.org/ today!

Source: https://bitsharestalk.org/index.php/topic,20214.msg261448/topicseen.html#msg261448

Created by hybridd

[Tuck Fheman]

You're doing it wrong!

#sharebits "tonyk" 5 PERCENT

[tonyk]

I don't think we should reduce it past 110 or 10%. I think in reducing it we are reducing the incentive for people to protect the network against a black swan. While I understand this can skew the price of the MPA by 10%, I dont think the problem is the SQP price but the fact that there no one is willing to sell MPA for 10% profit.

The SQP affects only margin calls, so as long as the shorters keep their positions sufficiently collateralized there is no problem.
The purpose of the SQP is to protect the MPA from a black swan. Reducing the SQP increases the likelyhood of a black swan, which would cause serious damage to our ecosystem.
Conclusion: don't reduce the SQP!

You guys never stop to amuse me.
The fact that you are all coders, and so no doubt very smart...so you believe you know everything and can give expert opinion on every single thing you come across.

 

[pc]

I don't think we should reduce it past 110 or 10%. I think in reducing it we are reducing the incentive for people to protect the network against a black swan. While I understand this can skew the price of the MPA by 10%, I dont think the problem is the SQP price but the fact that there no one is willing to sell MPA for 10% profit.

The SQP affects only margin calls, so as long as the shorters keep their positions sufficiently collateralized there is no problem.
The purpose of the SQP is to protect the MPA from a black swan. Reducing the SQP increases the likelyhood of a black swan, which would cause serious damage to our ecosystem.
Conclusion: don't reduce the SQP!

[iHashFury]

Have a listen to beyond bitcoin recording for 20151127.

SQP is discussed in detail

[lafona]

I don't think we should reduce it past 110 or 10%. I think in reducing it we are reducing the incentive for people to protect the network against a black swan. While I understand this can skew the price of the MPA by 10%, I dont think the problem is the SQP price but the fact that there no one is willing to sell MPA for 10% profit.

[cube]

bump!

[xeroc]

[Price Feed] asset specific SQP etc
https://github.com/xeroc/python-graphenelib/commit/21f22a93c2812819fa2590866ec345f562646120

The configuration file syntax has changed!!

[alt]

I agree we can try to set SQP to 1000, or some else.
but before we adjust this, we should give a hard limit first, like SQP can't more than 1100. and can't less than XXXX.

[clout]

if you have bitUSD, when you know the SQP will change from 1100 to 1090, next to 1080, next to 1070 ....
you'd best sell bitUSD to the force margin call ASAP to get more benifit.
this will help liquility

if the SQP always 1000, or always 1100, maybe you will not hurry, and always wait...

and I don't agree set SQP less than 1000, the shorter should buy back the bitUSD actively, or need pay more.
if set SQP less than 1000, the shorter will prefer don't buy back bitUSD.

Then what happens when you get down to or near 1000, will you bring the SQP back up. There is no reason to dynamically alter the SQP because it shouldn't exist at all.  The SQP is another example of BM trying to fix a problem that doesn't exist and in the process worsening the functionality of the Bitshares markets.

[tonyk]

if you have bitUSD, when you know the SQP will change from 1100 to 1090, next to 1080, next to 1070 ....
you'd best sell bitUSD to the force margin call ASAP to get more benifit.
this will help liquility

if the SQP always 1000, or always 1100, maybe you will not hurry, and always wait...

and I don't agree set SQP less than 1000, the shorter should buy back the bitUSD actively, or need pay more.
if set SQP less than 1000, the shorter will prefer don't buy back bitUSD.

well I agree on one thing with SQP below 1000...it will be the first time in BTS space, the shorters (liquidity providers, mind you) starting to get somewhat of equal footing....
but then I know it is always better to screw them and find other ways to grow the system (still screwing them preferably)

Good plan!

Good idea!

For sure working GREAT for the past 18 months....

(Tuck will send you the good idea tokens, btw)

[alt]

if you have bitUSD, when you know the SQP will change from 1100 to 1090, next to 1080, next to 1070 ....
you'd best sell bitUSD to the force margin call ASAP to get more benifit.
this will help liquility

if the SQP always 1000, or always 1100, maybe you will not hurry, and always wait...

and I don't agree set SQP less than 1000, the shorter should buy back the bitUSD actively, or need pay more.
if set SQP less than 1000, the shorter will prefer don't buy back bitUSD.

[tonyk]

SQP to 1000 i think doesn't work.  Forced margin call may never trigger.  It would require buying at or beyond the feed/settlement.

I'm not sure I understand what the hoped for result is of moving from 1100 to 1030.  In a market that doesn't want them at a 10% discount,  surely doesn't want them at only a 3% discount.   The closer SQP gets to 0% the more risk your taking of an ultimately under collateralized position.   This was the purpose of SQP being initially set at 1500 or 50%, because surely someone will always trade for a 50% discount to settle out the margin call.   (it has issues though as we've discussed)

I would be curious to see what happens though setting to 3%.  If traders are truly trading around the SQP limits or if 10% off settlement is just the risk priced market rate .

I just had a thought, ... First, what If SQP was only triggered if feed falls below call limit, but the SQP percentage was base on how far the feed is beyond the call limit. With feed at the call limit, SQP could be 0%.  With feed at 10% beyond the call limit,  SQP could scale to 10% also.  So the further beyond the call limit the feed gets, the more urgent it is to settle the margin call.

another random thought, Could we allow for under collateralized positions have the market continue and either wait/hope the price returns to where it can be collateralized and settled or if it was never going to happen you might authorize a worker to fund whatever was needed to settle the missing collateral. (i havn't thought about this at all just random)

I'm a little tired though, so I hope these made sense , and not too random.

how come they do not work at 1000 (or 900 for that matter) it is a just a buy order at feed (0.9*feed respectively)

*when all other call conditions are met.

** and yes, I will try to make close to 50% when the systems allows me to make close to 50%, close to 10% when 10% is the max allowed, etc...

*** for the purpose of this discussion I will ignore the  stupendous fact that SQP, is a market order moving in the 'fuck you  direction' with the feed, for the shorter.

[bitcrab]

110% is MSSR, SQP is asset specific,  SQP=settlement price/MSSR, right?

in BM's short  term road map post below item is listed:

1.  Prevent margin call from being triggered unless the price feed is less than call price  (popular demand)

https://bitsharestalk.org/index.php/topic,20214.0.html

if I understand correctly, this change means to adjust the MSSR to 100%.
why not to push BM to implement this?

[Xeldal]

SQP to 1000 i think doesn't work.  Forced margin call may never trigger.  It would require buying at or beyond the feed/settlement.

I'm not sure I understand what the hoped for result is of moving from 1100 to 1030.  In a market that doesn't want them at a 10% discount,  surely doesn't want them at only a 3% discount.   The closer SQP gets to 0% the more risk your taking of an ultimately under collateralized position.   This was the purpose of SQP being initially set at 1500 or 50%, because surely someone will always trade for a 50% discount to settle out the margin call.   (it has issues though as we've discussed)

I would be curious to see what happens though setting to 3%.  If traders are truly trading around the SQP limits or if 10% off settlement is just the risk priced market rate .

I just had a thought, ... First, what If SQP was only triggered if feed falls below call limit, but the SQP percentage was base on how far the feed is beyond the call limit. With feed at the call limit, SQP could be 0%.  With feed at 10% beyond the call limit,  SQP could scale to 10% also.  So the further beyond the call limit the feed gets, the more urgent it is to settle the margin call.

another random thought, Could we allow for under collateralized positions have the market continue and either wait/hope the price returns to where it can be collateralized and settled or if it was never going to happen you might authorize a worker to fund whatever was needed to settle the missing collateral. (i havn't thought about this at all just random)

I'm a little tired though, so I hope these made sense , and not too random. 

 

[tonyk]

I like the idea of lowering the SQP which tends to help the shorters, and which in turn provides liquidity.  I like to hear the pros and cons from the players (long and short) and other stakeholders.

@bytemaster  @bitcrab @tonyk  @Xeldal  @maqifrnswa @mindphlux   your input are appreciated.

Please share your views.

1000 all the way... I can argue for 990, but not in form today to explain it best.


PS
ohh and do not ask BM, he is for 1500 from the start. That is how he got me for 750K BTS...or did I get him???

[cube]

I like the idea of lowering the SQP which tends to help the shorters, and which in turn provides liquidity.  I like to hear the pros and cons from the players (long and short) and other stakeholders.

@bytemaster  @bitcrab @tonyk  @Xeldal  @maqifrnswa @mindphlux   your input are appreciated.

Please share your views.

[Fox]

I support adjusting down the sort squeeze. Currently publishing 1090 and will continue down while watching market.

[alt]

sounds legit ..

shall I implement a flexible asset-specific SQP parameter in the price feed script?

that will be a big help

[clout]

Hey guys can we experiment by making the SQP = 1000 and just keep it there.  I think it will create liquidity and create a better peg... everyone implicitly expects trade to happen at the price feed anyways.

Yes we should do this. SQP is a bad hack for dealing with illiquid markets and further reduces liquidity by discouraging shorts to enter the market. It also discourages those that would maintain a neutral position by simultaneously going long and short a given bitasset and providing market making for the bitasset and its real world counterpart.

[merivercap]

Hey guys can we experiment by making the SQP = 1000 and just keep it there.  I think it will create liquidity and create a better peg... everyone implicitly expects trade to happen at the price feed anyways.

[xeroc]

sounds legit ..

shall I implement a flexible asset-specific SQP parameter in the price feed script?

[alt]

currently all asset's SQP is 1100, which means force margin call wil buy debt  at  price 1.1*feedprice
I saw in some markets like:BTC/BTS USD/BTS, people want to buy back at price x1.1, but the asset holders still don't want to sell.
so I will decrease the SQP for USD&BTC, 1100 -> 1090 -> 1080 -> 1070 -> 1060 -> 1050 -> 1040 -> 1030
to keep the value of MPA, I will not set it less than 1030.

in the other hand, when asset hoders want to sell asset less than feed price, but no one buy back, I will increase the SQP, but not more than 1100.