Author Topic: Market Maker Incentivization Worker Proposal ($300)  (Read 20055 times)

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Offline fav

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$300 is reasonable, let's test it and see where it goes.

Offline bitcrab

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make sense, although it bring complexity.
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Offline luckybit

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The issue I see with this is that later on in the game, market makers won't be incentivised enough to provide liquidity.  You may think that at this point the asset will have reached "critical mass" and won't need liquidity, but I doubt that will be the case.  Stocks, bonds, and forex all have market makers still and their volume is more than BTS may ever be able to dream about.

I like the idea of incentivising people to bootstrap liquidity for assets at the beginning, but there needs to be a provision for market makers in the future.  I would suggest making vesting a part of the equation.  If someone promises to keep providing liquidity by reinvesting their profits, they should be provided with more maker shares.  Someone promising to provide guaranteed liquidity for 5 years is much more valuable than someone who will provide liquidity for 3 months.  These shares could be cashed out early, but only with a penalty and distributing the penalized maker shares back into the reserve.

Profit reinvestment needs to be a feature. Why isn't it?
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Offline luckybit

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https://github.com/cryptonomex/graphene/issues/475

This is the first of many new proposals that don't cost the BTS stakeholders much of anything to get powerful new features.  In this case all the stakeholders must do is grant permission for a hardfork that implements a new feature.  100% of the new feature is self funded. 

The result is a new investment opportunity for those who want to invest on a per-feature basis in assets that are not a SECURITY because they are not a liability.

Please read the issue for more details.

This looks like a great solution.
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Offline Empirical1.2

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Well the price is good  :)

My concern is that it ties BTS long term into approach which may not work.

It seems complicated & commits BTS to an approach which might not work for an extended period of time.

I would rather we tried some negative fee approaches, funded by a worker proposal on a single market, possibly experimenting with a few so that we can find out what incentives market makers respond too and what creates a tight peg in the best, most cost effective way rather than going all in on a specific long term approach from the start. 

Smartcoins are also different to other crypto in that people are concerned about the relative price they are paying. In order to get people to leave their orders on the books we might need to allow people to specify they would like to purchase BitUSD at 1.01 for example. I can't remember seeing whether this would be possible or not and the cost.


« Last Edit: December 08, 2015, 10:27:52 am by Empirical1.2 »
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Offline xeroc

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I  don`t think it is a good idea to make Market Maker as a base feather of block chain  protocol level
The market maker is NOT implemented on the block chain level ..
The proposal proposes a way to PAY market makers for their liquidity!

Offline xeroc

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Is this limited to UIA's only, or can it be applied to MPA's PrivateMPA's and
Core asset BTS?
Current Smartcoins don't ask for a trading fee. But since the committee
controls them, they could a) ask for trading fees b) 'enable' MSHARES and c)
define how much of the fees are used for buybacks. (at least that is my
understanding of the proposal)

Quote
It seems like there will be opportunity to abuse this, at least in the
beginning, where few people are competing.  The fee's payed trading with
yourself seem minuscule compared to the possible gain if that Asset ever becomes
popular.  I guess that is a risk though, that it may not be popular. 

I'm trying to envision what this competing will look like.  Everyone trying to
trade with themselves without offering too good of a price and also trying to
avoid filling someone else's order. 

If your own order is the cheapest available.  Other than the fee, is there any
reason NOT to trade with yourself?  If not shouldn't we expect every market to
completely saturate based on the perceived future volume of that market?

I think the conclusion I'm coming to is that these attempted "abuses" are
actually good for everyone.  All participants will be taking their own risks,
and not participating costs you nothing.  Its not a further complication because
not knowing about it doesn't hurt you.   The more competition, the tighter the
spread and greater collected network fees.  Whats to lose?  +5%

Thanks for the analysis! +5%



Plot twist: what will happen if we allowed people to trade MSHARES directly instead of handing them out to makers?
Think of
* BTS for shareholders of the super DAC
* OBITs for shareholders of a partner business
* FEATUREUIA for shareholders of a business unit
* MSHARES for shareholders of a particular market

thinking about it .. MSHARES feel like artistcoins for a market (a pair of TWO assets)

I like it .. very much!
« Last Edit: December 08, 2015, 08:15:13 am by xeroc »

Offline BTSdac

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I  don`t think it is a good idea to make Market Maker as a base feather of block chain  protocol level
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Offline maqifrnswa

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The issue I see with this is that later on in the game, market makers won't be incentivised enough to provide liquidity.  You may think that at this point the asset will have reached "critical mass" and won't need liquidity, but I doubt that will be the case.  Stocks, bonds, and forex all have market makers still and their volume is more than BTS may ever be able to dream about.
...

I think the idea is that in steady state there will be "normal" market maker rules that are common on other exchanges (makers pay less fees, or takers pay fees to makers).
But there will also be this 'start up' period where there is a bonus, which is not common.

maintains an Ubuntu PPA: https://launchpad.net/~showard314/+archive/ubuntu/bitshares [15% delegate] wallet_account_set_approval maqifrnswa true [50% delegate] wallet_account_set_approval delegate1.maqifrnswa true

Offline lil_jay890

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The issue I see with this is that later on in the game, market makers won't be incentivised enough to provide liquidity.  You may think that at this point the asset will have reached "critical mass" and won't need liquidity, but I doubt that will be the case.  Stocks, bonds, and forex all have market makers still and their volume is more than BTS may ever be able to dream about.

I like the idea of incentivising people to bootstrap liquidity for assets at the beginning, but there needs to be a provision for market makers in the future.  I would suggest making vesting a part of the equation.  If someone promises to keep providing liquidity by reinvesting their profits, they should be provided with more maker shares.  Someone promising to provide guaranteed liquidity for 5 years is much more valuable than someone who will provide liquidity for 3 months.  These shares could be cashed out early, but only with a penalty and distributing the penalized maker shares back into the reserve.

Offline Chronos

How is this proposal better than a negative 0.2% maker fee, which would also reward makers according to the volume they generate, and be much, much less complex?

Xeldal

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Is this limited to UIA's only, or can it be applied to MPA's PrivateMPA's and Core asset BTS?

It seems like there will be opportunity to abuse this, at least in the beginning, where few people are competing.  The fee's payed trading with yourself seem minuscule compared to the possible gain if that Asset ever becomes popular.  I guess that is a risk though, that it may not be popular. 

I'm trying to envision what this competing will look like.  Everyone trying to trade with themselves without offering too good of a price and also trying to avoid filling someone else's order. 

If your own order is the cheapest available.  Other than the fee, is there any reason NOT to trade with yourself?  If not shouldn't we expect every market to completely saturate based on the perceived future volume of that market?

I think the conclusion I'm coming to is that these attempted "abuses" are actually good for everyone.  All participants will be taking their own risks, and not participating costs you nothing.  Its not a further complication because not knowing about it doesn't hurt you.   The more competition, the tighter the spread and greater collected network fees.  Whats to lose?  +5%

 
« Last Edit: December 08, 2015, 02:33:18 am by Xeldal »

Offline puppies

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Is this a standard market feature anywhere else?

Any concern about further complicating trading?

Any concern about freezing markets due to incentivising placing orders that won't immediately match? 

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