Author Topic: Committee Proposal: Urgent call for help by the Chinese Community  (Read 29564 times)

0 Members and 1 Guest are viewing this topic.

Offline Akado

  • Hero Member
  • *****
  • Posts: 2752
    • View Profile
  • BitShares: akado
if its a feed issue doesnt it mean ots on the witnesses to solve this? why dont they increase the price by 5% if thats the problem
https://metaexchange.info | Bitcoin<->Altcoin exchange | Instant | Safe | Low spreads

Offline clayop

  • Hero Member
  • *****
  • Posts: 2033
    • View Profile
    • Bitshares Korea
  • BitShares: clayop
The urgent crises is that we have many committee members gone wild, who do not understand the system they are representing. 
The other urgent crises is that we continue voting for these committee members who consistently demonstrate they don't have a clue how things work.

Settlement is not a loophole, and is nothing new.  Its been available since the begining.  it was thoroughly discussed and understood long prior to BTS2 and is a critical function. 

Any available arbitrage opportunity is due to improper pricing of bitCNY by its users/gateways etc.  If transwiser is taking a loss they need to adjust their pricing.  We do not need to change the entire design of bitshares markets to fit 1 gateways uninformed business model.

There is no need to disable the settlement.  If it doesn't already, forced settlement should take all available bids below the feed before pulling from the least collateralized shorts.

You're right on that settlement is not a new feature nor wrong. The problem we have now is the feed price of CNY is too low (about 5%) and hence there's possibility to misuse the settlement function for free money (this hurts shorters)

So this proposal is just temporary. Once the price feed is fixed, settlement will be back.
Bitshares Korea - http://www.bitshares.kr
Vote for me and see Korean Bitshares community grows
delegate-clayop

Offline JonnyB

  • Hero Member
  • *****
  • Posts: 636
    • View Profile
    • twitter.com/jonnybitcoin
The urgent crises is that we have many committee members gone wild, who do not understand the system they are representing. 
The other urgent crises is that we continue voting for these committee members who consistently demonstrate they don't have a clue how things work.

Settlement is not a loophole, and is nothing new.  Its been available since the begining.  it was thoroughly discussed and understood long prior to BTS2 and is a critical function. 

Any available arbitrage opportunity is due to improper pricing of bitCNY by its users/gateways etc.  If transwiser is taking a loss they need to adjust their pricing.  We do not need to change the entire design of bitshares markets to fit 1 gateways uninformed business model.

There is no need to disable the settlement.  If it doesn't already, forced settlement should take all available bids below the feed before pulling from the least collateralized shorts.

this 100%
I run the @bitshares twitter handle
twitter.com/bitshares

Xeldal

  • Guest
The urgent crises is that we have many committee members gone wild, who do not understand the system they are representing. 
The other urgent crises is that we continue voting for these committee members who consistently demonstrate they don't have a clue how things work.

Settlement is not a loophole, and is nothing new.  Its been available since the begining.  it was thoroughly discussed and understood long prior to BTS2 and is a critical function. 

Any available arbitrage opportunity is due to improper pricing of bitCNY by its users/gateways etc.  If transwiser is taking a loss they need to adjust their pricing.  We do not need to change the entire design of bitshares markets to fit 1 gateways uninformed business model.

There is no need to disable the settlement.  If it doesn't already, forced settlement should take all available bids below the feed before pulling from the least collateralized shorts. 




 

Offline clayop

  • Hero Member
  • *****
  • Posts: 2033
    • View Profile
    • Bitshares Korea
  • BitShares: clayop
I'm the one whos been buying BITCNY and settling it for bts profit. :-)

what we need for efficient liquid markets is this:

Allow  a buy/sell order that moves with the settlement price +/-  a deviation as a percentage.

Eg.
buy at settlement feed - 2% 
or
sell at settlement feed + 2%

this would allow joe bloggs to add liquidity to all markets very easily and avoid smartcoins being sold below settlement price.

others have suggested we need to copy bitstamps instant buy function where it adds a buy order at highest price and adjusts it to be the highest bid but not buying into the sell wall. This is not the same as what I have suggested above and I don't think it would help.

The relative order function was discusses in here, but it has some problems IIRC.

Xeroc will release new price feed script next week using more realistic BTC conversion rate to CNY.
Bitshares Korea - http://www.bitshares.kr
Vote for me and see Korean Bitshares community grows
delegate-clayop

Offline JonnyB

  • Hero Member
  • *****
  • Posts: 636
    • View Profile
    • twitter.com/jonnybitcoin
I'm the one whos been buying BITCNY and settling it for bts profit. :-)

what we need for efficient liquid markets is this:

Allow  a buy/sell order that moves with the settlement price +/-  a deviation as a percentage.

Eg.
buy at settlement feed - 2% 
or
sell at settlement feed + 2%

this would allow joe bloggs to add liquidity to all markets very easily and avoid smartcoins being sold below settlement price.

others have suggested we need to copy bitstamps instant buy function where it adds a buy order at highest price and adjusts it to be the highest bid but not buying into the sell wall. This is not the same as what I have suggested above and I don't think it would help.

I run the @bitshares twitter handle
twitter.com/bitshares

Offline Bhuz

  • Committee member
  • Sr. Member
  • *
  • Posts: 467
    • View Profile
  • BitShares: bhuz
Background
The recent release of GUI wallet introduces a 'Force Settlement' button. This Force Settlement function allows some users to exploit the current 'loophole' in the bitCNY market and gain profit at the expense of the bitCNY providers.
(See https://bitsharestalk.org/index.php/topic,20283.0.html and https://bitsharestalk.org/index.php/topic,20287.0.html)

Transwiser (a major partner who provides bitCNY<->CNY fiat) and a number of Chinese users who depend on this service are suffering big losses.  This is not the worst.  They fear more losses to come.

The Force Settlement function closes the borrow/short positions with lowest collateral ratio and sells their collateral at the settlement price. For the bitCNY market, this means an immediate loss to the shorters (and a gain for the ‘force settle’ users) because bitCNY is trading below the feed price. As we found out, the feed price does not accurately reflect the CNY price.  It is in fact lower than the price listed in major China websites like OKCoin. The price discrepancy created an artificial arbitrage opportunity for the ‘Force Settle’ opportunists.

In addition, the shorters will be forced to sell their collateral even if they have sufficient collaterals to avoid a margin call. 

All this means that the Force Settle opportunists could force settle to exchange bitCNY for BTS on the DEX and then sell them at profit in a centralized chinese exchange eg BTC38.  This HURTS A LOT of bitCNY shorters, no matter the liquidity available in the DEX.

Effectively, they are being forced to sell their collaterals and close their positions against their will.  This introduction of this ‘force settlement’  was not known by the Chinese community at large.  Little wonder that the Chinese community considers this behaviour as ‘robbing the shorters’.


Urgent call for help
bitcrab and alt, representing the Chinese community, called on the committee members for help. After a lengthy and intense discussion (for over six hours), we consider the situation warrants an urgent response as follows:


1) Temporarily SUSPEND the "force settlement" function by raising its fee to 1Billion for about a  week.

This will give us time to put in a remedy:

1) Disable frontend "settlement" button when there are buy orders available above the feed (requires Svk work)
2) Adjust price feed for bitCNY market by including other Chinese exchanges in sourcing CNY prices (xeroc has agreed to work on the changes)
3) Get a CNY liquidity bot to put up buy orders with bids over the feed price and so protecting the shorters from abusing the force settlement function for an opportunistic gain.  ( bitcrab to work on it)

In normal circumstances, the Committee would like to give the Community enough time to discuss the proposals we intend to put up - first with a forum discussion and then setting the proposal period to one week.

As we are facing a crisis now, we would like to ask the Community to support the Chinese’s call for help - and to make this change as soon as possible (within 24 hours) in order to save the Chinese shorters from further losses.

We seek your kind understanding and support for this proposal.

The Bitshares Committee
« Last Edit: November 28, 2015, 03:30:03 am by Bhuz »