Smart Coins & Forced Settlement

[tonyk]

I will assume you are talking to me [as per the 'mindless'] remark.

you have a very wrong ideas for most of the content of your last post... I have never taken any kind of turn on my take on Nubits
[to be totally honest my take preceded BM's with at least a good few hours]. Nor do I foresee changing my view anytime soon...or ever.

So even if I have never used the word scam, it is simply because I have not seen the evil intent show itself... and so I prefer to call it endless stupidity...idiocy and alike. Anyone caring to check or ask will be fully aware that my disdain for this project is stronger than just about anyone's I have come across.

###
Now on the 'under collateralized speculators' comments. This is indeed the topic, I wish we can open a new thread, where I can help you with your brain washed (mindless) take on things.

[Erlich Bachman]

here, I think you took a wrong turn back there

www.nubits.com

notice they advertise themselves as a "stable value" coin not "face value guaranteed"

tell them we said "hi"

and that not only is bitUSD simply  "stable" but "guaranteed face value" unlike any other coin in the history of the world

but then again, what do greedy under collateralized speculators care of "mindless" world history and the pursuit of the unprecedented

[tonyk]

Personally I find mindless pumps as destructive as mindless complains...but I do realize this a minority take on things.

[Erlich Bachman]

what's the problem?

can't seem to waste enough of BM's time?

bitUSD is a crypto with a solid $1 price floor. it's that simple.

who pays the price (guaranteed liquidity) which allows for this unique store of value to exist?

dumb shorts who try to get away with posting little to no collateral (smart shorts post adequate collateral)

anyone else getting hurt here besides wealthy speculators who can afford such low collateralized gambles?

nope

so why should we have to listen to rich kids cry? can we have a separare forum page for low collateralized shorts who took a gamble trying to get something for nothing (rich quick) and lost?
 
please? I'll donate to fund it, because this wasting of BM's time is getting out of hand Mr. Speculator.

So now that the Transwire's grand opening bitCNY sale has ended, can we please let BM get back to doing productive shit like making our bond market or anon feature and quit bitching about the pigs that get slaughtered?  it happens by definition.

If you want a Nubitz clone, make one and issue it as a UIA, otherwise back to work. Lunch break is over.

bitUSD is simply a private key that allows you to store US dollars on it, and still sleep easy knowing that you can always sell them for face value

what is bitUSD?

face value USD

does any other USD crypto token guarantee "face value"?

no?

well I'm just glad that I live in a world where a face value USD crypto token exists.

bitUSD guarantees face value

Anybody here who wants to give up our first mover advantage on a

GUARANTEED FACE VALUE USD CRYPTO

must be working for the competition. Crybabies please go back to NuBitz and leave the talent alone. They are busy building shit like

the world's first and only FACE VALUE GUARANTEED CRYPTO usd

can we move on now please?

because "Face Value Coin" is not going anywhere. you can compete with it, and I wish you luck, but the cat is now out of th bag, and it aint going back. BTW, have you tried sending bitcoin lately? It's fucking caveman coin. Sorry, but no, we are not going backwards here. FVC is here to stay.

and no shit FVC costs more than a buck to buy. Why? Because it can be sold for "FV guaranteed"

derp

now somebody please delete these crying threads. they are boring and distracting the new business customers who are just now trying out the wallet for the first time. Remember  your first time?

[tonyk]

if the price of gold rockets 50% tomorrow and I want sell it I can't.

At 2% max settlement per day the chances are other gold speculators will take the 2% for themselves leaving every other bitgold holder with a smartcoin pegged to nothing.

Sorry, I do not think I followed your logic.

But yes, it has always been meant as psychological (never used) comfort pillow for the asset holders. Not a main tool for them, to say nothing about speculators wanting to catch the instance they think the price is at its best....all this is my take only, of course.

###############

Another good answer is - of course you can. just like in any other market, you can sell it in the market.

[JonnyB]

We are we changing from 20% max settlement to 2% ?

With a supply of $115000 this means the community can only settle $2300

If I or someone else settles $2300 per day it means nobody else will be able to setlle at all which doesn't seem right.

everyone said CNY feed price was wrong which has been fixed so what's the reason for a 90% drop in daily settlements?

Leave it at 20% where it is.

@bytemaster did you mean to set it at 20% or 2%?

Jonny this dubious, never existing, highly unprofitable business was non existing even in its heyday [do not trust bitcrab, alt or anybody else who was telling you otherwise, or how dangerous it was for the shorts or how much the shorts can lose by it]

and 'yes' the design has always been aiming at about 1% max force settlement per day.

so say I want to speculate on the gold price and buy 1 ounce of bitGOLD because I hear it is a safe pegged asset.

if the price of gold rockets 50% tomorrow and I want sell it I can't.

At 2% max settlement per day the chances are other gold speculators will take the 2% for themselves leaving every other bitgold holder with a smartcoin pegged to nothing.

[tonyk]

We are we changing from 20% max settlement to 2% ?

With a supply of $115000 this means the community can only settle $2300

If I or someone else settles $2300 per day it means nobody else will be able to setlle at all which doesn't seem right.

everyone said CNY feed price was wrong which has been fixed so what's the reason for a 90% drop in daily settlements?

Leave it at 20% where it is.

@bytemaster did you mean to set it at 20% or 2%?

Jonny this dubious, never existing, highly unprofitable business of yours was non existing even in its heyday [do not trust bitcrab, alt or anybody else who was telling you otherwise, or how dangerous it was for the shorts or how much the shorts can lose by it]

and 'yes' the design has always been aiming at about 1% max force settlement per day.

PS
Congrats on achieving 5 min of content on 7 sec of info, btw.

[JonnyB]

We are we changing from 20% max settlement to 2% ?

With a supply of $115000 this means the community can only settle $2300

If I or someone else settles $2300 per day it means nobody else will be able to setlle at all which doesn't seem right.

everyone said CNY feed price was wrong which has been fixed so what's the reason for a 90% drop in daily settlements?

Leave it at 20% where it is.

@bytemaster did you mean to set it at 20% or 2%?

[cube]

Created 1.10.21, documented how I created it:  https://github.com/cryptonomex/graphene/wiki/Howto-propose-committee-actions

thanks, I think we  need to change this for all asset right?
do we must do it one by one?

I have the same opinion. We have to update all smartcoins, especially USD.

Voted.

I wonder if there is  a way to make a proposal to update all the bitassets at one go, rather than one bitasset at a time.

[clayop]

Created 1.10.21, documented how I created it:  https://github.com/cryptonomex/graphene/wiki/Howto-propose-committee-actions

thanks, I think we  need to change this for all asset right?
do we must do it one by one?

I have the same opinion. We have to update all smartcoins, especially USD.

[alt]

Created 1.10.21, documented how I created it:  https://github.com/cryptonomex/graphene/wiki/Howto-propose-committee-actions

thanks, I think we  need to change this for all asset right?
do we must do it one by one?

[tonyk]

We are not so sure about this any more. @roadscape did some analysis of the code:

generally all percent figures in graphene are based on this:
#define GRAPHENE_100_PERCENT 10000
so if the max_force_settlement_vol is 2,000 that would suggest 20%

also I see this:
#define GRAPHENE_DEFAULT_FORCE_SETTLEMENT_MAX_VOLUME (20* GRAPHENE_1_PERCENT)

@bytemaster

I ask for correct this parameter to 2% before reenable setltement
because if we enable settlement with parameter 20%, it's enough to attrack an attack.
the commitee don't agree me without your command @bytemaster
please give an input

It was always supposed to be 2% in the first place not 20%  There is a lot less opportunity to abuse the system if you an only force cover 2% of it a day.

How is using one of the features of the system abusing it?

It was 'wrong feeds' before,  and now  is what?

[Ander]

We are not so sure about this any more. @roadscape did some analysis of the code:

generally all percent figures in graphene are based on this:
#define GRAPHENE_100_PERCENT 10000
so if the max_force_settlement_vol is 2,000 that would suggest 20%

also I see this:
#define GRAPHENE_DEFAULT_FORCE_SETTLEMENT_MAX_VOLUME (20* GRAPHENE_1_PERCENT)

@bytemaster

I ask for correct this parameter to 2% before reenable setltement
because if we enable settlement with parameter 20%, it's enough to attrack an attack.
the commitee don't agree me without your command @bytemaster
please give an input

It was always supposed to be 2% in the first place not 20%  There is a lot less opportunity to abuse the system if you an only force cover 2% of it a day.

[theoretical]

Created 1.10.21, documented how I created it:  https://github.com/cryptonomex/graphene/wiki/Howto-propose-committee-actions

[clayop]

According to the code:

Code: [Select]

/** percentage fields are fixed point with a denominator of 10,000 */                                                                                                                                                                       
#define GRAPHENE_100_PERCENT                                    10000                                                                                                                                                                       
#define GRAPHENE_1_PERCENT                                      (GRAPHENE_100_PERCENT/100)   

Before launch I went through every place in the witness_node where percentages are used and standardized most of them to use GRAPHENE_100_PERCENT.  I just now checked the code which handles the max force settlement, and it definitely uses these constants.  So 2000 definitely represents 20%.

You can see that it is currently set to 2000 for BitUSD (and I don't doubt for the other assets as well):

Code: [Select]

>>> get_asset USD
{
   ...
   "issuer": "1.2.0"
...
  "bitasset_data_id": "2.4.21"
}
>>> get_object 2.4.21
{
...
      "maximum_force_settlement_volume": 2000,
...
}

I can state with certainty that it is currently 20%.  It is possible to change with a committee proposal of asset_update_operation.

Great care should be taken on any such proposal to ensure the issuer permissions and flags have the same values as before.

Thanks for confirming and clarifying.
If it's not intentionally designed, can Devs make a proposal (to the originally intended one, say 2%?) at the earliest convenience?
@theoretical @bytemaster

[theoretical]

According to the code:

Code: [Select]

/** percentage fields are fixed point with a denominator of 10,000 */                                                                                                                                                                       
#define GRAPHENE_100_PERCENT                                    10000                                                                                                                                                                       
#define GRAPHENE_1_PERCENT                                      (GRAPHENE_100_PERCENT/100)   

Before launch I went through every place in the witness_node where percentages are used and standardized most of them to use GRAPHENE_100_PERCENT.  I just now checked the code which handles the max force settlement, and it definitely uses these constants.  So 2000 definitely represents 20%.

You can see that it is currently set to 2000 for BitUSD (and I don't doubt for the other assets as well):

Code: [Select]

>>> get_asset USD
{
   ...
   "issuer": "1.2.0"
...
  "bitasset_data_id": "2.4.21"
}
>>> get_object 2.4.21
{
...
      "maximum_force_settlement_volume": 2000,
...
}

I can state with certainty that it is currently 20%.  It is possible to change with a committee proposal of asset_update_operation.

Great care should be taken on any such proposal to ensure the issuer permissions and flags have the same values as before.

[alt]

the commitee don't agree me without your command @bytemaster

It's not about a command ... it's about knowing for certainty if it is 2% or 20% .. if it really was 20% .. then most would definitely agree with you!

sorry, maybe it's my misunderstand

[tonyk]

Now if only tinyGiantCancer has used his influence on the committee to change/stop a real problem like this [or SQP] instead of using it to defend his business interest on a none issue...



and yes I do believe in some particular days more than 2% of bitCNY were settled.


NOOOOOOOOOOOO it was stopped for something else...re-enable it right now! deal with this 'new' issue after that!

[xeroc]

the commitee don't agree me without your command @bytemaster

It's not about a command ... it's about knowing for certainty if it is 2% or 20% .. if it really was 20% .. then most would definitely agree with you!

[alt]

We are not so sure about this any more. @roadscape did some analysis of the code:

generally all percent figures in graphene are based on this:
#define GRAPHENE_100_PERCENT 10000
so if the max_force_settlement_vol is 2,000 that would suggest 20%

also I see this:
#define GRAPHENE_DEFAULT_FORCE_SETTLEMENT_MAX_VOLUME (20* GRAPHENE_1_PERCENT)

@bytemaster

I ask for correct this parameter to 2% before reenable setltement
because if we enable settlement with parameter 20%, it's enough to attrack an attack.
the commitee don't agree me without your command @bytemaster
please give an input

[merivercap]

it's my fault not to pay enough attention to the force settlement feature in 2.0, you have the opportunity because transwiser kept on selling BitCNY at 1 CNY to the market in past.

the force settlement feature bring additional risks to the shorter, the result is that BitCNY will worth more than 1 CNY, with a variable premium.

merchant/customers need a cryptocurrency that has fixed value,  they just need a simple value transfer media, nothing more, to calculate/check/split the premium need to pay more time/energy/management cost, a BitCNY with variable premium added to 1 CNY is not what the really need.

BitCNY has been a good payment media for merchant/customers,  there have been merchant(BTC38), customers(btc38 users), acceptance dealer(transwiser), now the introduction of the force settle make all the above have no space to stay and only speculators will enjoy.

market need speculators, but if there are only speculators in the market, speculators will find no chance to make profit.

 

I agree with you and I'm glad to see that it worked well as a payment media for merchants/customers in China.  I don't think it's much different here.  That's precisely how I envision bitCash to work.   

very different, one important principle for the design of a currency system is to balance the responsibility, power, and benefit of each role in the market. you can check the design of DAI for reference, there are also force settlement there, but the rule is that the user who request force settlement will pay penalty according to the collateral ratio of the  short position that will be settled, the higher the collateral ratio, the higher the penalty.

this rule make a better balance. and shorter can enter to the market without many worry, and it is possible to peg.

the current rule in BTS2.0 do too much good to bitcny holders, but do bad to shorters, the balance is destroyed.

to peg is also important, what merchant/customers need is a payment media with fixed value, security and convenience, in bts1.0, transwiser can help BitCNY to realize this, but now, there's no chance for transwiser to do the same.

I agree with you.  There was just some miscommunication.  In my previous comment I just meant  'I don't think there's much difference here [in the US compared to China.]'

[xeroc]

@alt X% force settle per day is independent with each asset

When I talk about prices I always think in FIAT prices.  So USD per BTS or USD per BitUSD.  I know this is the opposite of how many in crypto think in terms of their favorite token.

Few understand the whole system.  Many have discussed it, understood it, and since forgot it.   We have to "re-learn" many times unless you live/breath it full time.

http://cryptofresh.com/a/CNY

Max force settle vol   2000

Does 2000 mean 2% or 20%?

2%

We are not so sure about this any more. @roadscape did some analysis of the code:

generally all percent figures in graphene are based on this:
#define GRAPHENE_100_PERCENT 10000
so if the max_force_settlement_vol is 2,000 that would suggest 20%

also I see this:
#define GRAPHENE_DEFAULT_FORCE_SETTLEMENT_MAX_VOLUME (20* GRAPHENE_1_PERCENT)

@bytemaster

[bitcrab]

it's my fault not to pay enough attention to the force settlement feature in 2.0, you have the opportunity because transwiser kept on selling BitCNY at 1 CNY to the market in past.

the force settlement feature bring additional risks to the shorter, the result is that BitCNY will worth more than 1 CNY, with a variable premium.

merchant/customers need a cryptocurrency that has fixed value,  they just need a simple value transfer media, nothing more, to calculate/check/split the premium need to pay more time/energy/management cost, a BitCNY with variable premium added to 1 CNY is not what the really need.

BitCNY has been a good payment media for merchant/customers,  there have been merchant(BTC38), customers(btc38 users), acceptance dealer(transwiser), now the introduction of the force settle make all the above have no space to stay and only speculators will enjoy.

market need speculators, but if there are only speculators in the market, speculators will find no chance to make profit.

 

I agree with you and I'm glad to see that it worked well as a payment media for merchants/customers in China.  I don't think it's much different here.  That's precisely how I envision bitCash to work.   

very different, one important principle for the design of a currency system is to balance the responsibility, power, and benefit of each role in the market. you can check the design of DAI for reference, there are also force settlement there, but the rule is that the user who request force settlement will pay penalty according to the collateral ratio of the  short position that will be settled, the higher the collateral ratio, the higher the penalty.

this rule make a better balance. and shorter can enter to the market without many worry, and it is possible to peg.

the current rule in BTS2.0 do too much good to bitcny holders, but do bad to shorters, the balance is destroyed.

to peg is also important, what merchant/customers need is a payment media with fixed value, security and convenience, in bts1.0, transwiser can help BitCNY to realize this, but now, there's no chance for transwiser to do the same.


 

[merivercap]

it's my fault not to pay enough attention to the force settlement feature in 2.0, you have the opportunity because transwiser kept on selling BitCNY at 1 CNY to the market in past.

the force settlement feature bring additional risks to the shorter, the result is that BitCNY will worth more than 1 CNY, with a variable premium.

merchant/customers need a cryptocurrency that has fixed value,  they just need a simple value transfer media, nothing more, to calculate/check/split the premium need to pay more time/energy/management cost, a BitCNY with variable premium added to 1 CNY is not what the really need.

BitCNY has been a good payment media for merchant/customers,  there have been merchant(BTC38), customers(btc38 users), acceptance dealer(transwiser), now the introduction of the force settle make all the above have no space to stay and only speculators will enjoy.

market need speculators, but if there are only speculators in the market, speculators will find no chance to make profit.

 

I agree with you and I'm glad to see that it worked well as a payment media for merchants/customers in China.  I don't think it's much different here.  That's precisely how I envision bitCash to work.   

[bitcrab]

after 2 years of experimenting I think the best was the first and original rule..depending on demand for bitassets the bitusd could be at a discount or a premium..period..no expiration no SQP and shinny formulas..nothing..traders would short when bitasset was at premium and people would buy bitasset when in discount forcing the peg
Merchants accepting bitusd as a form of payment would know that at some point their bitasset would worth more or less but at least there would be liquidity from traders and the risk for not beeing able to convert all their bitasset in fiat would be minimal..Now after 2 years we have no liquidity, no traders in the DEX nothing..anyway..

I agree about SQP. Margin calls should only happen when they absolutely must (since it is destroying BTS when in undersupply), and therefore should be tied to whatever is the most liquid/accurate market values. SQP of 1 (fixed to price feed) makes most sense until internal markets are liquid enough.

"traders would short when bitasset was at premium and people would buy bitasset when in discount forcing the peg"
That did not work. The very first bitshares (version 0.1 or something like that)  tried this with no price feed or incentives to maintain peg, and price ran away very quickly. Why should I pay for something with no intrinsic value just because it has the label "USD" on it? I'll sell you 1000 maqifrsnwaUSD for 1000.

forced settlement is both the "gold standard" and the "federal reserve." It is the "gold standard" since you can always redeem your smartcoin for the equivalent value in something else. It is the "federal reserve" since it incentivizes the destruction of smartcoins when supply exceeds demand such that value is maintained. What (fiat) currency in the world exists without either a "gold standard" or a "federal reserve?"

Confession of a force-settler (before the GUI made it easy):
I will confess that I was a forced-settler before the GUI came out. I was a force-settler because I spent the time to learn the system inside and out in order to test some bots for both smartcoins and UIA (I believe UIA with properly regulated KYC is the growth market for BTS). My bots know nothing about the underlying assets, they only know the market rules: Sell high, buy low, never sell an asset for less than it can be settled for, if you can buy an asset for less than it can be settled then buy the assets and settle. This behavior is rational, generates profit, and keeps BitShares working efficiently - so it is a win-win for everyone. I feel it is a "service" to the community. I probably settled 1-2k CNY since it started. No other market presented settlement opportunities. I did not know why CNY presented this opportunity; I guessed there was a larger supply of "whales" trying to gain leverage any way they can in risky ways.

When I first heard of Transwiser, I was shocked at the business model (since it seemed like it would always lose money since 1 bitCNY> 1CNY) but also extremely impressed that they figured out to "beat the system" where I could not. The service was great for BTS and I was looking forward to them expanding to other currencies.

When I heard about the price feed data inaccuracy, at first I felt bad but then realized that the error was in some thinking smartcoins were something they were not. See: https://bitsharestalk.org/index.php/topic,20375.0/topicseen.html Even if the feed was incorrect, all businesses must know that the feed is all that matters and build their business model off of that (or work to correct the feed).

Now that we're almost through this "crisis," I think we're all stronger. Feeds are more accurate, people know what smartcoins are, and businesses know to research the system completely before building on top of it.

it's my fault not to pay enough attention to the force settlement feature in 2.0, you have the opportunity because transwiser kept on selling BitCNY at 1 CNY to the market in past.

the force settlement feature bring additional risks to the shorter, the result is that BitCNY will worth more than 1 CNY, with a variable premium.

merchant/customers need a cryptocurrency that has fixed value,  they just need a simple value transfer media, nothing more, to calculate/check/split the premium need to pay more time/energy/management cost, a BitCNY with variable premium added to 1 CNY is not what the really need.

BitCNY has been a good payment media for merchant/customers,  there have been merchant(BTC38), customers(btc38 users), acceptance dealer(transwiser), now the introduction of the force settle make all the above have no space to stay and only speculators will enjoy.

market need speculators, but if there are only speculators in the market, speculators will find no chance to make profit.

[merivercap]

the rule should guarentee two thing:
1. if I want to buy bitCNY, I can buy it at price 1.0 + premium
2. if I want to sell bitCNY, I can sell it at price 1.0 - premium
and the premium should not too small, my suggest is more than 2%
then market maker will give a better offer, with more small premium
then we can buy/sell bitCNY at price 1.0 with small premium from the free wallet market.

force settlement is a way to guarentee you can sell bitCNY at a floor price, so I think the price should set to  * (1.0 - premium) CNY/bitCNY
when the price of BTS is 0.02 CNY/BTS, witness should set settlement price to 0.02 / (1.0 - premium)

on the other hand, force settlement will hurt shorters, because this force them sell BTS even when they have enough collatereal.
so we should  not encourage people use this, we can set the premium to 2% or more,  as compensate for the one be settled.

for all witness, if you approve my point, you can change the parameter at xeroc's price scripts
set discount to 1.02
to avoid add aditional fee for bitCNY,  you should change core_exchange_factor to 1.02 too

Something like this would balance the market more, but many bitAsset holders want to keep it for the long term so adding that uncertainty of forced settlement would not be attractive.  We want long term bitAsset holders and long term shorters.... not the unpredictability of force settlement battles...

[alt]

the rule should guarentee two thing:
1. if I want to buy bitCNY, I can buy it at price 1.0 + premium
2. if I want to sell bitCNY, I can sell it at price 1.0 - premium
and the premium should not too small, my suggest is more than 2%
then market maker will give a better offer, with more small premium
then we can buy/sell bitCNY at price 1.0 with small premium from the free wallet market.

force settlement is a way to guarentee you can sell bitCNY at a floor price, so I think the price should set to  * (1.0 - premium) CNY/bitCNY
when the price of BTS is 0.02 CNY/BTS, witness should set settlement price to 0.02 / (1.0 - premium)

on the other hand, force settlement will hurt shorters, because this force them sell BTS even when they have enough collatereal.
so we should  not encourage people use this, we can set the premium to 2% or more,  as compensate for the one be settled.

for all witness, if you approve my point, you can change the parameter at xeroc's price scripts
set discount to 1.02
to avoid add aditional fee for bitCNY,  you should change core_exchange_factor to 1.02 too
and set SQP more than 1020

and I want to tell again, let witness just input feed price, which is the real price from exchange
let commitee adust SQP, settlement price

[alt]

@Bytemаsteг can you tell me when market price is 0.02CNY/BTS, what should I set settlement price?
I want set 2% premium, the settlement price should be 0.02*1.02 or 0.02/1.02?

1. as a bitCNY holder, I think price floor means the minimal BTS I can buy with my bitCNY, it's BTS/CNY
so if you want to price it with CNY/BTS, it should be called price ceiling
so the settlement price should greater than real price we got from the exchange?

2. you have set a volume limit, I think of course you want to protect some attack.
but I think this volume limit is still too weak.
may I ask you, do you belive current 0.02CNY/BTS is the real price of BTS? do you belive there are no manipulate?
I think the price is totally unbeliveable, it's because of manipulate of couse.
what I have seen is the whals can manipulate the price so easy, and keep the period so long.
so I don't think the  volume protect is enough.
and if somebody ask force settlement my short position at this price, I can never accept it. so my choise is I'll never short more bitasset.
we are lucky the whals don't read the whitepater carefully, if he know, he can force settlement all short position at such a long time.

I want to ask all the BTS holders, do you accepet the deal? whals buy out all your BTS at such a price, 0.02CNY/BTS
if the answer is no, never short, or this can happend very possible.

@alt X% force settle per day is independent with each asset

When I talk about prices I always think in FIAT prices.  So USD per BTS or USD per BitUSD.  I know this is the opposite of how many in crypto think in terms of their favorite token.

Few understand the whole system.  Many have discussed it, understood it, and since forgot it.   We have to "re-learn" many times unless you live/breath it full time.

[bytemaster]

@alt X% force settle per day is independent with each asset

When I talk about prices I always think in FIAT prices.  So USD per BTS or USD per BitUSD.  I know this is the opposite of how many in crypto think in terms of their favorite token.

Few understand the whole system.  Many have discussed it, understood it, and since forgot it.   We have to "re-learn" many times unless you live/breath it full time.

http://cryptofresh.com/a/CNY

Max force settle vol   2000

Does 2000 mean 2% or 20%?

2%

[xeroc]

2%

[clayop]

@alt X% force settle per day is independent with each asset

When I talk about prices I always think in FIAT prices.  So USD per BTS or USD per BitUSD.  I know this is the opposite of how many in crypto think in terms of their favorite token.

Few understand the whole system.  Many have discussed it, understood it, and since forgot it.   We have to "re-learn" many times unless you live/breath it full time.

http://cryptofresh.com/a/CNY

Max force settle vol   2000

Does 2000 mean 2% or 20%?

[tonyk]

The premium should also decrease when BTS is rising & increase when BTS is falling in value I guess.

Do not guess be sure.
If you think of decreasing prices as increased downside volatility, you combine the generally correct statement by Xeroc - the increased volatility leads (should lead) to higher premiums - with the exact kind of volatility that affects the premium the most.

[bytemaster]

Customers use BitUSD because it provides them the convenience and freedom of a cryptocurrency, and has the lowest transfer fees of any other payment platform.

The transfer fees are not as low now.
Are we coming back to advertise BitShares as a payment platform? Haven't we argued that BitShares is mainly in exchange business?

That text hasn't changed so there is no "coming back". 
The purpose of BitUSD is to create a currency pegged to the dollar.  Currency is used for payment.
BitUSD depends upon a  successful exchange.

Perhaps we need to remove the word "lowest" and simply say "low".

[abit]

Customers use BitUSD because it provides them the convenience and freedom of a cryptocurrency, and has the lowest transfer fees of any other payment platform.

The transfer fees are not as low now.
Are we coming back to advertise BitShares as a payment platform? Haven't we argued that BitShares is mainly in exchange business?

[bytemaster]

after 2 years of experimenting I think the best was the first and original rule..depending on demand for bitassets the bitusd could be at a discount or a premium..period..no expiration no SQP and shinny formulas..nothing..traders would short when bitasset was at premium and people would buy bitasset when in discount forcing the peg
Merchants accepting bitusd as a form of payment would know that at some point their bitasset would worth more or less but at least there would be liquidity from traders and the risk for not beeing able to convert all their bitasset in fiat would be minimal..Now after 2 years we have no liquidity, no traders in the DEX nothing..anyway..

I agree about SQP. Margin calls should only happen when they absolutely must (since it is destroying BTS when in undersupply), and therefore should be tied to whatever is the most liquid/accurate market values. SQP of 1 (fixed to price feed) makes most sense until internal markets are liquid enough.

"traders would short when bitasset was at premium and people would buy bitasset when in discount forcing the peg"
That did not work. The very first bitshares (version 0.1 or something like that)  tried this with no price feed or incentives to maintain peg, and price ran away very quickly. Why should I pay for something with no intrinsic value just because it has the label "USD" on it? I'll sell you 1000 maqifrsnwaUSD for 1000.

forced settlement is both the "gold standard" and the "federal reserve." It is the "gold standard" since you can always redeem your smartcoin for the equivalent value in something else. It is the "federal reserve" since it incentivizes the destruction of smartcoins when supply exceeds demand such that value is maintained. What (fiat) currency in the world exists without either a "gold standard" or a "federal reserve?"

Confession of a force-settler (before the GUI made it easy):
I will confess that I was a forced-settler before the GUI came out. I was a force-settler because I spent the time to learn the system inside and out in order to test some bots for both smartcoins and UIA (I believe UIA with properly regulated KYC is the growth market for BTS). My bots know nothing about the underlying assets, they only know the market rules: Sell high, buy low, never sell an asset for less than it can be settled for, if you can buy an asset for less than it can be settled then buy the assets and settle. This behavior is rational, generates profit, and keeps BitShares working efficiently - so it is a win-win for everyone. I feel it is a "service" to the community. I probably settled 1-2k CNY since it started. No other market presented settlement opportunities. I did not know why CNY presented this opportunity; I guessed there was a larger supply of "whales" trying to gain leverage any way they can in risky ways.

When I first heard of Transwiser, I was shocked at the business model (since it seemed like it would always lose money since 1 bitCNY> 1CNY) but also extremely impressed that they figured out to "beat the system" where I could not. The service was great for BTS and I was looking forward to them expanding to other currencies.

When I heard about the price feed data inaccuracy, at first I felt bad but then realized that the error was in some thinking smartcoins were something they were not. See: https://bitsharestalk.org/index.php/topic,20375.0/topicseen.html Even if the feed was incorrect, all businesses must know that the feed is all that matters and build their business model off of that (or work to correct the feed).

Now that we're almost through this "crisis," I think we're all stronger. Feeds are more accurate, people know what smartcoins are, and businesses know to research the system completely before building on top of it.

Great post!  I think we can probably place a warning in the GUI that prevents someone from selling below the price feed and instead suggests they force settle (if the market supports force settle).   The price feed is constantly moving, so there will always be opportunities for bots like yours to pick up orders below the force settle price and then convert them into force settlement requests.

[maqifrnswa]

after 2 years of experimenting I think the best was the first and original rule..depending on demand for bitassets the bitusd could be at a discount or a premium..period..no expiration no SQP and shinny formulas..nothing..traders would short when bitasset was at premium and people would buy bitasset when in discount forcing the peg
Merchants accepting bitusd as a form of payment would know that at some point their bitasset would worth more or less but at least there would be liquidity from traders and the risk for not beeing able to convert all their bitasset in fiat would be minimal..Now after 2 years we have no liquidity, no traders in the DEX nothing..anyway..

I agree about SQP. Margin calls should only happen when they absolutely must (since it is destroying BTS when in undersupply), and therefore should be tied to whatever is the most liquid/accurate market values. SQP of 1 (fixed to price feed) makes most sense until internal markets are liquid enough.

"traders would short when bitasset was at premium and people would buy bitasset when in discount forcing the peg"
That did not work. The very first bitshares (version 0.1 or something like that)  tried this with no price feed or incentives to maintain peg, and price ran away very quickly. Why should I pay for something with no intrinsic value just because it has the label "USD" on it? I'll sell you 1000 maqifrsnwaUSD for 1000.

forced settlement is both the "gold standard" and the "federal reserve." It is the "gold standard" since you can always redeem your smartcoin for the equivalent value in something else. It is the "federal reserve" since it incentivizes the destruction of smartcoins when supply exceeds demand such that value is maintained. What (fiat) currency in the world exists without either a "gold standard" or a "federal reserve?"

Confession of a force-settler (before the GUI made it easy):
I will confess that I was a forced-settler before the GUI came out. I was a force-settler because I spent the time to learn the system inside and out in order to test some bots for both smartcoins and UIA (I believe UIA with properly regulated KYC is the growth market for BTS). My bots know nothing about the underlying assets, they only know the market rules: Sell high, buy low, never sell an asset for less than it can be settled for, if you can buy an asset for less than it can be settled then buy the assets and settle. This behavior is rational, generates profit, and keeps BitShares working efficiently - so it is a win-win for everyone. I feel it is a "service" to the community. I probably settled 1-2k CNY since it started. No other market presented settlement opportunities. I did not know why CNY presented this opportunity; I guessed there was a larger supply of "whales" trying to gain leverage any way they can in risky ways.

When I first heard of Transwiser, I was shocked at the business model (since it seemed like it would always lose money since 1 bitCNY> 1CNY) but also extremely impressed that they figured out to "beat the system" where I could not. The service was great for BTS and I was looking forward to them expanding to other currencies.

When I heard about the price feed data inaccuracy, at first I felt bad but then realized that the error was in some thinking smartcoins were something they were not. See: https://bitsharestalk.org/index.php/topic,20375.0/topicseen.html Even if the feed was incorrect, all businesses must know that the feed is all that matters and build their business model off of that (or work to correct the feed).

Now that we're almost through this "crisis," I think we're all stronger. Feeds are more accurate, people know what smartcoins are, and businesses know to research the system completely before building on top of it.

[mf-tzo]

after 2 years of experimenting I think the best was the first and original rule..depending on demand for bitassets the bitusd could be at a discount or a premium..period..no expiration no SQP and shinny formulas..nothing..traders would short when bitasset was at premium and people would buy bitasset when in discount forcing the peg
Merchants accepting bitusd as a form of payment would know that at some point their bitasset would worth more or less but at least there would be liquidity from traders and the risk for not beeing able to convert all their bitasset in fiat would be minimal..Now after 2 years we have no liquidity, no traders in the DEX nothing..anyway..

[Empirical1.2]

I think I understand the price floor a bit better now.

It should give a great deal of confidence to anyone accepting BitAssets as payment and they will probably also be able to convert their BitUSD to real USD at a very favourable rate.

It is negative for businesses that want to convert Currency to BitAssets as they will probably only be able to do so at something like 0.95 - 1.

It is negative for the poorly collateralised shorts especially during BTS bullish periods, as other shorts may be willing to short below the peg giving instant profit opportunity to longs at their expense.

It also puts some pressure on the price feed accuracy I guess and creates a large premium to compensate for it.

I think it's worth trying because the certainty that 1 BitUSD is always redeemable for 1 USD worth of BTS is very strong in terms of creating confidence for BitAsset accepting third parties. 

It might be though that the system works better with a slightly lower price floor so the premium when entering BitAssets is more reasonable & not that I understand the price feed issues exactly but a lower floor may also lower the premium associated with that and make the BitAsset range tighter.

The premium will get lower with higher liquidity but it will not stay constant over time.
Dan and me, we think that the premium will be higher in times of high volatility in BTS .. and lower in times with less volatility

The premium should also decrease when BTS is rising & increase when BTS is falling in value I guess.

(When people are bullish on BTS they are willing to pay a premium to gain a leveraged position as was demonstrated by people shorting far below the peg in the first iteration of BitAssets.)

[mf-tzo]

The premium will get lower with higher liquidity but it will not stay constant over time.
Dan and me, we think that the premium will be higher in times of high volatility in BTS .. and lower in times with less volatility

I am not sure how this is fair though...I have noticed that when we were @ $18 mil market cap with high volume and volatility before the bts2 launch I wanted to cover my bitusd short positions and  I couldn't because I had to pay a premium of 30%-40% for the bitusd..So eventually I din't cover and finally I have decided to cover when we were @ $8 mil to avoid potential margin call. I did pay a premium of only 5% and my bts collateral released eventually worth now much less..Are you saying that I should have covered back then and pay a premium of 40%??? If that is the case then we are doing something really really wrong!!!

Bottom line...No matter what I will never a short position in bitasset ever ever again because of this..I much prefer buy and sell bts at external exchanges..And don't get me wrong..I have been supporting the experiment of bts for the last 2 years in the DEX instead of dumping bts when they were high on external exchanges as everyone else was doing..We need to sort our things right after 2 years of experimenting if we want bts to survive..

[xeroc]

The premium will get lower with higher liquidity but it will not stay constant over time.
Dan and me, we think that the premium will be higher in times of high volatility in BTS .. and lower in times with less volatility

[mindphlux]

The way I understand it, the premium will get lower with more liquidity in the market, and could be much less than 1% eventually.

Is that assumption correct?

[Samupaha]

BitCNY play at least 2 roles in current ecosystem:

A.a value transfer media/payment tool between merchant and users.
B.a derivative played by investors/speculators.

so when we ask "is the fact that 1 BitCNY worth more than 1 CNY pros or cons?", we should first define for which role we are talking about.

unfortunately, I found "1 BitCNY worth more than 1 CNY" do good to role B, but hurt the role A.

This has been explained in the link that Bytemaster gave in the OP:

The Merchant
A merchant wants to be able to price merchandise in BitUSD, and obtain real USD in the bank account, in a reasonable time, with minimal risk. In this case, a merchant would place BitUSD on the market at $1 per BitUSD. As discussed, BTS buyers fight for the opportunity to buy BitUSD at that price.

A smart merchant might recognize that 1 BitUSD can actually fetch $1 plus a variable premium, and start preferring that customers pay them in BitUSD at face value. An even smarter merchant might offer a discount to customers that pay in BitUSD.

Any way you slice it, merchants have a financial incentive to advertise BitUSD as the preferred payment mechanism, because they know that $1.00 is the lower bound on what BitUSD is worth.

The Customer
A customer looking to buy goods and services with BitUSD finds himself paying a premium to acquire BitUSD from the market. This means that customers will prefer merchants that offer a discount equal to the premium paid. On the other hand, the premium is a wash for a customer that earned BitUSD at a nominal value of $1.00. In fact, the only people to whom the premium matters are those who are looking to enter or exit the ecosystem. Once a customer or merchant is within the ecosystem, it is easy to simply trade BitUSD at parity, even if it is theoretically worth slightly more outside the ecosystem.

Customers use BitUSD because it provides them the convenience and freedom of a cryptocurrency, and has the lowest transfer fees of any other payment platform.

Merchants and customers are free to negotiate the best way to split the premium, and the free market will take care of the rest. In the mean time, all participants can rest assured that BitUSD is always worth at least $1, and can consider the premium for entering the ecosystem as a one-time fee.

[bitcrab]

Bottom line, the market can price all of the risks which are highest during low liquidity, and get lower as liquidity improves. Someone who steps up to provide liquidity can "trust" in that liquidity and offer a competitive price over those who must trust someone else to provide liquidity.  Bottom line, someone should buy up a lot of BitCNY at a price above 1.0 and then turn around and provide liquidity in the range of 1.05 to 1.06.  The liquidity provider will make all of the money from back and forth trades and the shorts wouldn't really have to worry about getting force settled once there was ample liquidity.

hi BM, thanks for your explanation, I think I totally understand the design, but there are still things to discuss.

BitCNY play at least 2 roles in current ecosystem:

A.a value transfer media/payment tool between merchant and users.
B.a derivative played by investors/speculators.

so when we ask "is the fact that 1 BitCNY worth more than 1 CNY pros or cons?", we should first define for which role we are talking about.

unfortunately, I found "1 BitCNY worth more than 1 CNY" do good to role B, but hurt the role A.

suppose xiaomi decided to accept BitCNY, and in market 1 BitCNY  = 1.05 CNY, then how should xiaomi list the price of its mobile product xiaomi4c? 1400CNY/1333BitCNY? it's too confusing to be feasible.

obviously,this fact will also make it impossible for BTC38 to accept BitCNY for user to deposit CNY.

we haven't considered yet that the CNY/BitCNY price may go up and down now and then, which will add more uncertaity for the payment role of BitCNY.

if the "perfect peg" is not necessary, then the service provided by transwiser is not necessary, BitCNY will be a toy of investors/speculators, not a payment media.

is this really what you want?

[BTSdac]

we are lucky the whals don't read the whitepater carefully, if he know, he can force settlement all short position at such a long time.

alt  I think you can do it now , but I think you cannot succeed
you said other lack of real operation , please do it now

[cube]

Are you saying CNY/BTS (around 0.0203) or BTS/CNY (around 49)? I was saying CNY/BTS. And bitCNY feed should be higher than CNY because the feed is a price of bitCNY, not CNY Wrong statement. Sorry.

you're not explaining yourself clearly

You didn't answer my question. Tell me when bitCNY has premium than CNY. It's price feed in terms of CNY/BTS is always lower (e.g. 0.0203) than exchanged price (0.0207). Compare USD/BTS depth chart and CNY/BTS chart. You'll find the difference.

Yes it does temporarily change the design of smartcoin. There was no emergency, if we change rules over non issues like this bitshares will not be trusted in the future. Yes I nearly paid 1 million bts to settle some bitCNY

There was some emergency, because someone (you may know who he is) was enjoying (for example, settled 4,200 CNY) free money with the wrong price feed. And you didn't pay 1 million BTS until your order is filled.

No transwiser will not be able to sustain their business model if they sell 1 bitCNY for 1 CNY
the price feed isn't out that drastically, you can ask the witnesses to make adjustments but should not change the rules of a smartcoin contract overnight.[/color]

Again, with this small difference, someone was exploiting the system.

Who's the someone? Can you answer?

@clayop
It's no secret I was buying bitCNY for less than the feed and settling it because I am a rational market participant.
I still have a big sub feed price buy wall up and will continue to profit from it again when instant settlement returns. :-)

I'm not exploiting bitshares I'm exploiting transwiser.

How much profit have you gained from your exploits so far?

[bitcrab]

@clayop
It's no secret I was buying bitCNY for less than the feed and settling it because I am a rational market participant.
I still have a big sub feed price buy wall up and will continue to profit from it again when instant settlement returns. :-)

I'm not exploiting bitshares I'm exploiting transwiser.

thanks for convincing me that it is correct for committee to disable the force settlement temporarily.

[cube]

I was damn serious for 3 days straight, alt. The only joke I made was the one above.[about jonny settling my short bitusds]

For the teaching others - take for example this shit:

https://bitsharestalk.org/index.php/topic,18475.msg251986.html#msg251986

even after I solve something for supposed bounty no one cares to pay...or explain why they are not paying for the very least.


PS
and brownies I did not get either.
why?
Because they by definition they require not only doing stuff but kissing BM's ass afterwards.

The only thing I actually get from BTS is every changing rules - some even hidden,  seemingly on purpose, that could have cost me 750K BTS if for not very  fast thinking and experimenting to learn what trap BM have in mind for me.

And after all this some whale comes around, makes the committee change the rules with no need for that and EVEN THOUGH THEY DID NOT LOSE A DIME AND THEY DID NOT KNOW A RULE THAT WAS  KNOWN FOR AGES

give me a break

I can feel you tonyk.  You feel you were unfairly treated.  You are one of the few experienced and smart fellows who dare to speak his mind, although at times in a cryptic and sarcastic manner.  The bad things that happened to you were unfortunate but they do not change the fact that you have made good contributions to the community, in your own way.

And after all this some whale comes around, makes the committee change the rules with no need for that and EVEN THOUGH THEY DID NOT LOSE A DIME AND THEY DID NOT KNOW A RULE THAT WAS  KNOWN FOR AGES

I can assure you the Committee members are making their decision independently and believe they are doing so for the best interest of Bitshares, not under influence by any so-called whales.  They genuinely felt the need to level the playing field by temporary suspending the 'settle' function and resolving the price feed script 'flaw' (I know, we probably cannot use this term now and have to find a better terminology) but by no means they are changing the rule.

I cannot really speak for others but my own personal view.  I will do the same utmost for you, the referrers or any other users if ever you/they became unfairly exploited due to some system flaws.

[alt]

I find SQP not right (very wrong actually) for this market.

I also am not shorts fan or longs fan - I want things in balance.

The force settlement rule is not so terrible for shorts and a great thing for the long positions holders.

If we do not punish the shorts with anything else unfair they can live well with the forced settlement, imo

thanks for the input, we can focus talking about the settlement finally.
I also want ask others don't say something like: Chinese communitee ...., transwiser ....,  at this thread.
just focus on the settlement rules, just talk about longers, shoters

I need to have a break too

[BTSdac]

I  think this debate sometimes useless , we should focus on the following question
1. Does must need settlement ?
 Yes , I think ,must need , the purpose of settlement  is to keep BTA( bitcny) value ,  describe it by formula is  bitcny:cny >=1,  it mean bitcny (more or less ) more valuable than cny .
2.what is withdraw of settlement?
Shorter have a risk of force settlement though he has a high collateral,    we know short is a exchange with 2 times lever, if you also use the borrowed bitcny buy bts .  so it have high profit/risk. I think it is reasonable .

3. what we can improve?
   3.1 consider just keep bitcny:cny >=0.995,  it mean the settle price is 0.995*feed price ( BTS/CNY,   it is 1.005, if use CNY/BTS)
   3.2 Settle price is when settle execute or the average price of 24 hours before execution  as tonyk`s suggestion
         

           I have a solution for your attack alt - use not last feed price but the 24h average price. It seems like 'expensive' operation but the fee is 1000BTS so it               should cover it.

   

[tonyk]

I was damn serious for 3 days straight, alt. The only joke I made was the one above.[about jonny settling my short bitusds]

For the teaching others - take for example this shit:

https://bitsharestalk.org/index.php/topic,18475.msg251986.html#msg251986

even after I solve something for supposed bounty no one cares to pay...or explain why they are not paying for the very least.


PS
and brownies I did not get either.
why?
Because they by definition they require not only doing stuff but kissing BM's ass afterwards.

The only thing I actually get from BTS is every changing rules - some even hidden,  seemingly on purpose, that could have cost me 750K BTS if for not very  fast thinking and experimenting to learn what trap BM have in mind for me.

And after all this some whale comes around, makes the committee change the rules with no need for that and EVEN THOUGH THEY DID NOT LOSE A DIME AND THEY DID NOT KNOW A RULE THAT WAS  KNOWN FOR AGES


give me a break

I can fell your feeling about the unfair, but I don't want to say it more.
what you have said the whale is transwiser right?
I'll push to change settlement rule not because of transwiser, but because of BTS
just like I push to change SQP from 1500 to 1100, next to 1000.
why do you support change SQP, but fell angry about change settlement rule?

I find SQP not right (very wrong actually) for this market.

I also am not shorts fan or longs fan - I want things in balance.

The force settlement rule is not so terrible for shorts and a great thing for the long positions holders.

If we do not punish the shorts with anything else unfair they can live well with the forced settlement, imo

[alt]

I was damn serious for 3 days straight, alt. The only joke I made was the one above.[about jonny settling my short bitusds]

For the teaching others - take for example this shit:

https://bitsharestalk.org/index.php/topic,18475.msg251986.html#msg251986

even after I solve something for supposed bounty no one cares to pay...or explain why they are not paying for the very least.


PS
and brownies I did not get either.
why?
Because they by definition they require not only doing stuff but kissing BM's ass afterwards.

The only thing I actually get from BTS is every changing rules - some even hidden,  seemingly on purpose, that could have cost me 750K BTS if for not very  fast thinking and experimenting to learn what trap BM have in mind for me.

And after all this some whale comes around, makes the committee change the rules with no need for that and EVEN THOUGH THEY DID NOT LOSE A DIME AND THEY DID NOT KNOW A RULE THAT WAS  KNOWN FOR AGES


give me a break

I can fell your feeling about the unfair, but I don't want to say it more.
what you have said the whale is transwiser right?
I'll push to change settlement rule not because of transwiser, but because of BTS
just like I push to change SQP from 1500 to 1100, next to 1000.
why do you support change SQP, but fell angry about change settlement rule?

[38PTSWarrior]

It's no secret I was buying bitCNY for less than the feed and settling it because I am a rational market participant.
I still have a big sub feed price buy wall up and will continue to profit from it again when instant settlement returns. :-)

I'm not exploiting bitshares I'm exploiting transwiser.

You were potentially exploiting all shorters, and finally Bitshares system.

Yes it's rational profit maximization choice, but based on inaccurate price feed. So are you angry because we fix the price feed and while suspend your free money exploiting?

I for one am so sad you prevented Jonny from exploiting my short bitUSD positions...just when I finally figured out how to be exploited and bam you guys stopped him  /s

so you are the guy who want to be settlement because you hold bitUSD short position?
Jonny are the guy who want to ask settlement because he hold bitCNY long position?
this is the reason why you two are so angry for pause the settlement?

of course I want to be settled in bitUSD. What is wrong with that, now?

You do not agree that the shorters should be allowed to make money? Be as it is once in a blue moon?

I agree your operation is correct of course.
but what I want to talk now is about the trade rule, not just for me or for you.

can you tell me what's your opinion without your personal profit?
maybe you'll refuse because I remember you have said you don't want to waste your time for teaching others.
maybe you'll lost chance to make money after you tell your real thought to others.

I was damn serious for 3 days straight, alt. The only joke I made was the one above.[about jonny settling my short bitusds]

For the teaching others - take for example this shit:

https://bitsharestalk.org/index.php/topic,18475.msg251986.html#msg251986

even after I solve something for supposed bounty no one cares to pay...or explain why they are not paying for the very least.


PS
and brownies I did not get either.
why?
Because they by definition they require not only doing stuff but kissing BM's ass afterwards.

The only thing I actually get from BTS is every changing rules - some even hidden,  seemingly on purpose, that could have cost me 750K BTS if for not very  fast thinking and experimenting to learn what trap BM have in mind for me.

And after all this some whale comes around, makes the committee change the rules with no need for that and EVEN THOUGH THEY DID NOT LOSE A DIME AND THEY DID NOT KNOW A RULE THAT WAS  KNOWN FOR AGES


give me a break

Only one thing to your brown nosing idea. You keep repeating over and over that one must kiss ass for it. Why do you do this? That's why I was so angry. You know how the nazis of hitler did it with the major of berlin? They repeated every day that he is a donkey. It worked.
If you repeat things every day some people will believe it. You are too smart not to know that. Brownie PTS are bytemasters way to keep track of people who helped him. Loyal people, fans who like to do stuff. Now check this. There are people who like helping and who do that because they believe in the person. This therefore has nothing to do with brown nosing.
You are not a donkey, he is not a donkey and i am also not a donkey.

That you deleted your donkey sig was great, thanks

[tonyk]

It's no secret I was buying bitCNY for less than the feed and settling it because I am a rational market participant.
I still have a big sub feed price buy wall up and will continue to profit from it again when instant settlement returns. :-)

I'm not exploiting bitshares I'm exploiting transwiser.

You were potentially exploiting all shorters, and finally Bitshares system.

Yes it's rational profit maximization choice, but based on inaccurate price feed. So are you angry because we fix the price feed and while suspend your free money exploiting?

I for one am so sad you prevented Jonny from exploiting my short bitUSD positions...just when I finally figured out how to be exploited and bam you guys stopped him  /s

so you are the guy who want to be settlement because you hold bitUSD short position?
Jonny are the guy who want to ask settlement because he hold bitCNY long position?
this is the reason why you two are so angry for pause the settlement?

of course I want to be settled in bitUSD. What is wrong with that, now?

You do not agree that the shorters should be allowed to make money? Be as it is once in a blue moon?

I agree your operation is correct of course.
but what I want to talk now is about the trade rule, not just for me or for you.

can you tell me what's your opinion without your personal profit?
maybe you'll refuse because I remember you have said you don't want to waste your time for teaching others.
maybe you'll lost chance to make money after you tell your real thought to others.

I was damn serious for 3 days straight, alt. The only joke I made was the one above.[about jonny settling my short bitusds]

For the teaching others - take for example this shit:

https://bitsharestalk.org/index.php/topic,18475.msg251986.html#msg251986

even after I solve something for supposed bounty no one cares to pay...or explain why they are not paying for the very least.


PS
and brownies I did not get either.
why?
Because they by definition they require not only doing stuff but kissing BM's ass afterwards.

The only thing I actually get from BTS is every changing rules - some even hidden,  seemingly on purpose, that could have cost me 750K BTS if for not very  fast thinking and experimenting to learn what trap BM have in mind for me.

And after all this some whale comes around, makes the committee change the rules with no need for that and EVEN THOUGH THEY DID NOT LOSE A DIME AND THEY DID NOT KNOW A RULE THAT WAS  KNOWN FOR AGES


give me a break

[alt]

transwiser buy/sell bitCNY at price 1.0CNY/bitCNY with a fee about 0.3%
in fact almost nobody know how to use settlement before it's visible at the web UI. so maybe nobody benifit from it.

What i don't understand is, if the feed was off all this time and didn't get  fix until the force settlement option become visible, who was benefiting all this time?  Doesn't that mean transwiser was profiting from a flaw all this time? Why wasn't it reported earlier? It should have been noticeable.

[alt]

It's no secret I was buying bitCNY for less than the feed and settling it because I am a rational market participant.
I still have a big sub feed price buy wall up and will continue to profit from it again when instant settlement returns. :-)

I'm not exploiting bitshares I'm exploiting transwiser.

You were potentially exploiting all shorters, and finally Bitshares system.

Yes it's rational profit maximization choice, but based on inaccurate price feed. So are you angry because we fix the price feed and while suspend your free money exploiting?

I for one am so sad you prevented Jonny from exploiting my short bitUSD positions...just when I finally figured out how to be exploited and bam you guys stopped him  /s

so you are the guy who want to be settlement because you hold bitUSD short position?
Jonny are the guy who want to ask settlement because he hold bitCNY long position?
this is the reason why you two are so angry for pause the settlement?

of course I want to be settled in bitUSD. What is wrong with that, now?

You do not agree that the shorters should be allowed to make money? Be as it is once in a blue moon?

I agree your operation is correct of course.
but what I want to talk now is about the trade rule, not just for me or for you.

can you tell me what's your opinion without your personal profit?
maybe you'll refuse because I remember you have said you don't want to waste your time for teaching others.
maybe you'll lost chance to make money after you tell your real thought to others.

[Pheonike]

What i don't understand is, if the feed was off all this time and didn't get  fix until the force settlement option become visible, who was benefiting all this time?  Doesn't that mean transwiser was profiting from a flaw all this time? Why wasn't it reported earlier? It should have been noticeable.

[JonnyB]

@clayop @Bhuz @alt

When instant settlement is back next week you'll have the CNY feeds sorted out and transwiser will have their liquidity bot or will have changed their fees.

Then we can all be happy!  just don't ever disable it again or you will serverly damage the reputation of smartcoins.

I want a functioning free market with low spreads and liquidity not artificial pegs from transwiser.

[tonyk]

It's no secret I was buying bitCNY for less than the feed and settling it because I am a rational market participant.
I still have a big sub feed price buy wall up and will continue to profit from it again when instant settlement returns. :-)

I'm not exploiting bitshares I'm exploiting transwiser.

You were potentially exploiting all shorters, and finally Bitshares system.

Yes it's rational profit maximization choice, but based on inaccurate price feed. So are you angry because we fix the price feed and while suspend your free money exploiting?

I for one am so sad you prevented Jonny from exploiting my short bitUSD positions...just when I finally figured out how to be exploited and bam you guys stopped him  /s

so you are the guy who want to be settlement because you hold bitUSD short position?
Jonny are the guy who want to ask settlement because he hold bitCNY long position?
this is the reason why you two are so angry for pause the settlement?

of course I want to be settled in bitUSD. What is wrong with that, now?

You do not agree that the shorters should be allowed to make money? Be as it is once in a blue moon?

[alt]

It's no secret I was buying bitCNY for less than the feed and settling it because I am a rational market participant.
I still have a big sub feed price buy wall up and will continue to profit from it again when instant settlement returns. :-)

I'm not exploiting bitshares I'm exploiting transwiser.

You were potentially exploiting all shorters, and finally Bitshares system.

Yes it's rational profit maximization choice, but based on inaccurate price feed. So are you angry because we fix the price feed and while suspend your free money exploiting?

I for one am so sad you prevented Jonny from exploiting my short bitUSD positions...just when I finally figured out how to be exploited and bam you guys stopped him  /s

so you are the guy who want to be settlement because you hold bitUSD short position?
Jonny are the guy who want to ask settlement because he hold bitCNY long position?
this is the reason why you two are so angry for pause the settlement?

[tonyk]

It's no secret I was buying bitCNY for less than the feed and settling it because I am a rational market participant.
I still have a big sub feed price buy wall up and will continue to profit from it again when instant settlement returns. :-)

I'm not exploiting bitshares I'm exploiting transwiser.

You were potentially exploiting all shorters, and finally Bitshares system.

Yes it's rational profit maximization choice, but based on inaccurate price feed. So are you angry because we fix the price feed and while suspend your free money exploiting?

I for one am so sad you prevented Jonny from exploiting my short bitUSD positions...just when I finally figured out how to be exploited and bam you guys stopped him  /s

[clayop]

It's no secret I was buying bitCNY for less than the feed and settling it because I am a rational market participant.
I still have a big sub feed price buy wall up and will continue to profit from it again when instant settlement returns. :-)

I'm not exploiting bitshares I'm exploiting transwiser.

You were potentially exploiting all shorters, and finally Bitshares system.

Yes it's rational profit maximization choice, but based on inaccurate price feed. So are you angry because we fix the price feed and while suspend your free money exploiting?

[Bhuz]

You are not exploiting transwiser, you are exploiting a flaw in the feed at the expenses of shorters, included transwiser.

[Bhuz]

JonnyBitcoin, you proved again that you wont even try to listen, if you would red my post you surely wouldn't reply as you just did. Or maybe is only due to the fact that you are very sorry and angry because you can not exploit the current cny market.

[alt]

@clayop
It's no secret I was buying bitCNY for less than the feed and settling it because I am a rational market participant.
I still have a big sub feed price buy wall up and will continue to profit from it again when instant settlement returns. :-)

I'm not exploiting bitshares I'm exploiting transwiser.

so naive just like a baby

[JonnyB]

Are you saying CNY/BTS (around 0.0203) or BTS/CNY (around 49)? I was saying CNY/BTS. And bitCNY feed should be higher than CNY because the feed is a price of bitCNY, not CNY Wrong statement. Sorry.

you're not explaining yourself clearly

You didn't answer my question. Tell me when bitCNY has premium than CNY. It's price feed in terms of CNY/BTS is always lower (e.g. 0.0203) than exchanged price (0.0207). Compare USD/BTS depth chart and CNY/BTS chart. You'll find the difference.

Yes it does temporarily change the design of smartcoin. There was no emergency, if we change rules over non issues like this bitshares will not be trusted in the future. Yes I nearly paid 1 million bts to settle some bitCNY

There was some emergency, because someone (you may know who he is) was enjoying (for example, settled 4,200 CNY) free money with the wrong price feed. And you didn't pay 1 million BTS until your order is filled.

No transwiser will not be able to sustain their business model if they sell 1 bitCNY for 1 CNY
the price feed isn't out that drastically, you can ask the witnesses to make adjustments but should not change the rules of a smartcoin contract overnight.[/color]

Again, with this small difference, someone was exploiting the system.

Who's the someone? Can you answer?

@clayop
It's no secret I was buying bitCNY for less than the feed and settling it because I am a rational market participant.
I still have a big sub feed price buy wall up and will continue to profit from it again when instant settlement returns. :-)

I'm not exploiting bitshares I'm exploiting transwiser.

[alt]

1. as a bitCNY holder, I think price floor means the minimal BTS I can buy with my bitCNY, it's BTS/CNY
so if you want to price it with CNY/BTS, it should be called price ceiling
so the settlement price should greater than real price we got from the exchange?

2. you have set a volume limit, I think of course you want to protect some attack.
but I think this volume limit is still too weak.
may I ask you, do you belive current 0.02CNY/BTS is the real price of BTS? do you belive there are no manipulate?
I think the price is totally unbeliveable, it's because of manipulate of couse.
what I have seen is the whals can manipulate the price so easy, and keep the period so long.
so I don't think the  volume protect is enough.
and if somebody ask force settlement my short position at this price, I can never accept it. so my choise is I'll never short more bitasset.
we are lucky the whals don't read the whitepater carefully, if he know, he can force settlement all short position at such a long time.

I want to ask all the BTS holders, do you accepet the deal? whals buy out all your BTS at such a price, 0.02CNY/BTS
if the answer is no, never short, or this can happend very possible.

@alt X% force settle per day is independent with each asset

When I talk about prices I always think in FIAT prices.  So USD per BTS or USD per BitUSD.  I know this is the opposite of how many in crypto think in terms of their favorite token.

Few understand the whole system.  Many have discussed it, understood it, and since forgot it.   We have to "re-learn" many times unless you live/breath it full time.

[clayop]

Are you saying CNY/BTS (around 0.0203) or BTS/CNY (around 49)? I was saying CNY/BTS. And bitCNY feed should be higher than CNY because the feed is a price of bitCNY, not CNY Wrong statement. Sorry.

you're not explaining yourself clearly

You didn't answer my question. Tell me when bitCNY has premium than CNY. It's price feed in terms of CNY/BTS is always lower (e.g. 0.0203) than exchanged price (0.0207). Compare USD/BTS depth chart and CNY/BTS chart. You'll find the difference.

Yes it does temporarily change the design of smartcoin. There was no emergency, if we change rules over non issues like this bitshares will not be trusted in the future. Yes I nearly paid 1 million bts to settle some bitCNY

There was some emergency, because someone (you may know who he is) was enjoying (for example, settled 4,200 CNY) free money with the wrong price feed. And you didn't pay 1 million BTS until your order is filled.

No transwiser will not be able to sustain their business model if they sell 1 bitCNY for 1 CNY
the price feed isn't out that drastically, you can ask the witnesses to make adjustments but should not change the rules of a smartcoin contract overnight.[/color]

Again, with this small difference, someone was exploiting the system.

Who's the someone? Can you answer?

[JonnyB]

@JonnyBitcoin
The really bad thing here is that You don't even try to listen and understand what we are saing.
You can continue in believe what you said replying to clayop, but it is just false.

-The price feed for CNY is lower than what it should be because the current script does not include some big chinese exchanges

-The committee has not changed any fundamental design of the system. The committee has temporary disabled a function that was used to exploit a situation in CNY market, caused by the inaccurate feed.
(function that probably more than 99.9% of the community never used before the gui introduction, yourself included I bet, so don't scream to the scandal if is not available for 1 week after months of being out of normal use)

-We need people that instead of insult and complain all the time, step up and put theirself on the table. Make a committee account and propose theirself for help the whole community and the current committee.

The change actually stopped the CLI client from doing a force settle because it was a fee change not a ui change.
I step up to the table by warning others users about the ramifications of a single vote from an ill advised committee.
The only thing we have that makes us special and different to ripple and others is smartcoins because of their floor peg to fiat, the committee removed that only USP we have even if it was just temporarily. 

 

[JonnyB]

the price feed is lower because CNY is cheaper than BitCNY

Are you saying CNY/BTS (around 0.0203) or BTS/CNY (around 49)? I was saying CNY/BTS. And bitCNY feed should be higher than CNY because the feed is a price of bitCNY, not CNY.

you're not explaining yourself clearly

the committee should never have done this as it changes the fundamental design of smartcoins and their purpose

Did the committee change the fundamental design? It's just a temporarily suspension. Why do you cannot wait for days? Did this decision give damages to you?

Yes it does temporarily change the design of smartcoin. There was no emergency, if we change rules over non issues like this bitshares will not be trusted in the future. Yes I nearly paid 1 million bts to settle some bitCNY

No transwiser will not be able to sustain their business model if they sell 1 bitCNY for 1 CNY

I agree. So price difference between price feed and exchanged price should be smaller that the conversion fee. But with the wrong price feed, they have to charge more than 3%, and it will significantly decrease demands. If the feed is fixed, they can charge smaller amount of fee.

the price feed isn't out that drastically, you can ask the witnesses to make adjustments but should not change the rules of a smartcoin contract overnight.

No clayop we do not need that. What we need is for people to elect someone to the committee who can replace you.
Someone who understands finance better than you do.

I encourage you to apply committee member instead of blaming others.

Maybe I will one day, but for now I will voice my opinion if I find a representative like yourself being reckless.

My proxy vote goes to @Xeldal at the moment

[bytemaster]

@alt X% force settle per day is independent with each asset

When I talk about prices I always think in FIAT prices.  So USD per BTS or USD per BitUSD.  I know this is the opposite of how many in crypto think in terms of their favorite token.

Few understand the whole system.  Many have discussed it, understood it, and since forgot it.   We have to "re-learn" many times unless you live/breath it full time. 

[alt]

thanks for the explain.
may I ask you some questions?
and I wonder except you how many other people who have discussed with you and understand the whole system can  answer it.

4. The presence of "forced settlement" is meant to maintain correlation to outside prices, not to set the price.  The actual price should be higher than the forced settlement price, hence the feed becomes a price FLOOR.  In general there should always be money to be made by offering to buy BitCNY with more BTS than you could get with forced settlement and then turning around and selling that BitCNY for even more BTS.  New BitCNY only enters the market when the price of BitCNY gets high enough to cover all of the liquidity risks.  In principle, someone who is short BitCNY and gets force settled is getting a HUGE deal.  They are effectively covering at the lowest possible premium (0), but unfortunately in exchange for getting the lowest possible premium, they do not get to choose the best possible time to exit their position. 

when you say price, it's CNY/BTS or BTS/CNY?

5. There is a daily limit on the percent of BitCNY supply that can be force settled.  Thus only the bottom X% of collateral holders are subject to risk.

what's the default %X?
is this parameter independence for each asset?

[Bhuz]

@JonnyBitcoin
The really bad thing here is that You don't even try to listen and understand what we are saing.
You can continue in believe what you said replying to clayop, but it is just false.

-The price feed for CNY is lower than what it should be because the current script does not include some big chinese exchanges

-The committee has not changed any fundamental design of the system. The committee has temporary disabled a function that was used to exploit a situation in CNY market, caused by the inaccurate feed.
(function that probably more than 99.9% of the community never used before the gui introduction, yourself included I bet, so don't scream to the scandal if is not available for 1 week after months of being out of normal use)

-We need people that instead of insult and complain all the time, step up and put theirself on the table. Make a committee account and propose theirself for help the whole community and the current committee.

[clayop]

the price feed is lower because CNY is cheaper than BitCNY

Are you saying CNY/BTS (around 0.0203) or BTS/CNY (around 49)? I was saying CNY/BTS.

the committee should never have done this as it changes the fundamental design of smartcoins and their purpose

Did the committee change the fundamental design? It's just a temporarily suspension. Why do you cannot wait for days? Did this decision give damages to you?

No transwiser will not be able to sustain their business model if they sell 1 bitCNY for 1 CNY

I agree. So price difference between price feed and exchanged price should be smaller that the conversion fee. But with the wrong price feed, they have to charge more than 3%, and it will significantly decrease demands. If the feed is fixed, they can charge smaller amount of fee.

No clayop we do not need that. What we need is for people to elect someone to the committee who can replace you.
Someone who understands finance better than you do.

I encourage you to apply committee member instead of blaming others.

[fav]

may be a good time to check out some free and transparent proxies https://bitsharestalk.org/index.php/board,104.0.html

[JonnyB]

So it was a problem with the price feed and not forced stllement?

There are two separate problems. One is obvious- price feed is lower than the exchanged price so bad actors can exploit gateway effectively. To prevent this, the committee suspended force settlement with emergency.
Another is quite debatable. The question maybe that "is force settlement a unfair disadvantage for shorters?", "Can transwise sustain with force settlement?". To resolve these questions, we need more cooperation and discussion I think.

@clayop  You really don't understand do you?

There are two separate problems. One is obvious- price feed is lower than the exchanged price so bad actors can exploit gateway effectively.

the price feed is lower because CNY is cheaper than BitCNY

To prevent this, the committee suspended force settlement with emergency.

the committee should never have done this as it changes the fundamental design of smartcoins and their purpose

Another is quite debatable. The question maybe that "is force settlement a unfair disadvantage for shorters?", "Can transwise sustain with force settlement?"

No transwiser will not be able to sustain their business model if they sell 1 bitCNY for 1 CNY

To resolve these questions, we need more cooperation and discussion I think.

No clayop we do not need that. What we need is for people to elect someone to the committee who can replace you.
Someone who understands finance better than you do.

[TravelsAsia]

BM thanks for your input and clarification.

1.  I agree the documentation was always there, but when things are moving at a fast pace any heads up or communication about significant updates would help core businesses like Transwiser be proactive.  Cosmetic changes are not a priority, but we should give ample warning for a GUI change that exposes a significant feature to the general public for the first time and changes the nature of trading.

Another case in point is that there seems to be a fork update on making margin calls only triggered when call prices are above the price feed.  (Btw that seems to be a fantastic change and thank you for doing that.)  However very few know the details and that could significantly change how things work so communicating the specifics of the change would help for the same reasons above.

Would this information be updated through the client? An update section on information like this would be nice.

[merivercap]

BM thanks for your input and clarification.

1.  I agree the documentation was always there, but when things are moving at a fast pace any heads up or communication about significant updates would help core businesses like Transwiser be proactive.  Cosmetic changes are not a priority, but we should give ample warning for a GUI change that exposes a significant feature to the general public for the first time and changes the nature of trading.

Another case in point is that there seems to be a fork update on making margin calls only triggered when call prices are above the price feed.  (Btw that seems to be a fantastic change and thank you for doing that.)  However very few know the details and that could significantly change how things work so communicating the specifics of the change would help for the same reasons above.

2.  I think 'flaw' is subjective, just like when people joke that 'something is a feature not a bug.'  There are those that always believed the design was a flaw and when something is actually implemented, more people may discover it to be the case and speak up. 

3.  I think parameterizing everything was fantastic and gives people confidence that we can make adjustments.  Thanks for doing that.  However privatized bitAssets are significantly more difficult to implement and exposes people who pursue that option to regulatory risk.  It would seem more appropriate for larger institutions to implement privatized bitAssets.  Hence the only other way is to adjust the parameters with committee members.  Another alternative is to allow two or perhaps three bitAssets (bitUSD1, bitUSD2, bitUSD3) run by committee members?

4., 5.  The main argument to any guarantee or floor is that it comes at the expense of shorters, the very group you need to generate bitAssets in the first place.  Guaranteeing liquidity to one side guarantees more illiquidity in the system.   To some of us a daily limit on force settlement just determines how much of a 'bad' thing we want.  To some us it sounds like: 'Do we want a little bit of a bad thing or more of it?'

I agree almost all derivative contracts usually have settlement dates, but a design without one is not necessarily bad.  Many usually roll over derivative contracts to continue the same terms of a contract indefinitely.  In the end the trading market should determine the ultimate cost of entry and exit, not the participants.  The idea that bitUSD holders have to pay for liquidity is also true for the shorts and guaranteeing something to one necessarily disincentives the other to participate. The result is that there will be less liquidity for the bitUSD holders to sell out in when there is forced settlement compare to when there is none.  The results of forced settlement will be the very opposite for which it was intended.   Lastly forced settlement is a tool for manipulation to the extent of the daily limit.  To some of us it sounds like: 'Do we want to allow a little bit of manipulation or a lot of it?'

Overall I think the trading design is great and workable with a few tweaks.  Forced settlement is one feature that I would remove.  If not, I think the second best solution is to allow another bitUSD2 asset to be created and run by separate committee members.  Businesses can choose to use one or the other.  What do you think is the feasibility of working towards that?

[clayop]

So it was a problem with the price feed and not forced stllement?

There are two separate problems. One is obvious- price feed is lower than the exchanged price so bad actors can exploit gateway effectively. To prevent this, the committee suspended force settlement with emergency.
Another is quite debatable. The question maybe that "is force settlement a unfair disadvantage for shorters?", "Can transwise sustain with force settlement?". To resolve these questions, we need more cooperation and discussion I think.

[Helikopterben]

So it was a problem with the price feed and not forced stllement?

[donkeypong]

Cleared the bases with that post.

[clayop]

See I told you so.  Some of the best bits.

There is nothing "new", "unexpected" or "flawed" in how the market is behaving

Without forced settlement BitUSD holders must pay for liquidity by selling for less than a dollar

BitCNY is greater than 1 CNY and anyone selling BitCNY for 1 CNY is assuming 100% of the cost of liquidity

The conclusion from this is that if you are going to borrower BitCNY and sell it into the market, then you should be prepared to be force settled

So what date will forced settlement be re enabled?

Next Wednesday probably.

Committee suspended the settlement function not because settlement is flawed or unexpectedly works.
The reason is that there is discrepancy between settlement price (price feed) and exchanged price, and hence opportunity for exploiting the gateway (transwiser) exists.

[JonnyB]

See I told you so.  Some of the best bits.

There is nothing "new", "unexpected" or "flawed" in how the market is behaving

Without forced settlement BitUSD holders must pay for liquidity by selling for less than a dollar

BitCNY is greater than 1 CNY and anyone selling BitCNY for 1 CNY is assuming 100% of the cost of liquidity

The conclusion from this is that if you are going to borrower BitCNY and sell it into the market, then you should be prepared to be force settled

So what date will forced settlement be re enabled?

[bytemaster]

I wanted to start a new thread to clear the air and establish some basic facts:

1. "Proper" documentation has existed since June 8th in a prominate location linked directly from the home page of bitshares.org
(https://bitshares.org/technology/price-stable-cryptocurrencies/)

2. For the past 6 months we have discussed in great length the various challenges and tradeoffs that must be made. There is nothing "new", "unexpected" or "flawed" in how the market is behaving.

3. I have stated that I don't know the best tradeoffs for the market, but we did parameterize everything so that we could experiment with it all and the spoils go to whoever figures out the magic equation.

4. The presence of "forced settlement" is meant to maintain correlation to outside prices, not to set the price.  The actual price should be higher than the forced settlement price, hence the feed becomes a price FLOOR.  In general there should always be money to be made by offering to buy BitCNY with more BTS than you could get with forced settlement and then turning around and selling that BitCNY for even more BTS.  New BitCNY only enters the market when the price of BitCNY gets high enough to cover all of the liquidity risks.  In principle, someone who is short BitCNY and gets force settled is getting a HUGE deal.  They are effectively covering at the lowest possible premium (0), but unfortunately in exchange for getting the lowest possible premium, they do not get to choose the best possible time to exit their position. 

5. There is a daily limit on the percent of BitCNY supply that can be force settled.  Thus only the bottom X% of collateral holders are subject to risk.

There are many reasons why we added "forced settlement" because it a feature of all derivative contracts. Without forced settlement BitUSD holders must pay for liquidity by selling for less than a dollar, with forced settlement the BitUSD holders must pay for liquidity in advance by buying for more than a dollar.  The difference for BitUSD holder and the Shorter is that the forced settlement feature gives them  certainty on what that cost/price of liquidity is in advance, whereas under the old rules, there is no way to predict future liquidity or whether there will be any when you need it.       

All of that said, the conclusion is that the value of BitCNY is greater than 1 CNY and anyone selling BitCNY for 1 CNY is assuming 100% of the cost of liquidity in the BitCNY / CNY market.
If someone is buying / selling BitCNY in the BitCNY / BTS market using a bot based on a data feed from other markets then they are assuming 100% of the price feed risk. Any deviations between the actual price feed and the the trader's internal models can result in risks.  They also assume responsibility for 100% of the risk due to price-feed-latency and short-term market movements.

The conclusion from this is that if you are going to borrower BitCNY and sell it into the market, then you should be prepared to be force settled at an "average price" rather than the instantaneous price.  Being short for "short-term" trading is the most dangerous unless you provide sufficient collateral to avoid getting settled.

Bottom line, the market can price all of the risks which are highest during low liquidity, and get lower as liquidity improves. Someone who steps up to provide liquidity can "trust" in that liquidity and offer a competitive price over those who must trust someone else to provide liquidity.  Bottom line, someone should buy up a lot of BitCNY at a price above 1.0 and then turn around and provide liquidity in the range of 1.05 to 1.06.  The liquidity provider will make all of the money from back and forth trades and the shorts wouldn't really have to worry about getting force settled once there was ample liquidity.