Liquidity has a Price -> Adding Maker / Taker

[xeroc]

We have come up with an internal design that we will be submitting for a worker proposal and or revenue sharing crowd funded proposal.   Let me document the details more closely and get an estimated cost in place and we can go from there.

There seems to be quite a few worker proposals coming through, and I'm wondering what sort of role CNX is playing.

Is CNX structuring/scheduling the workers in a way that it thinks BTS can handle and pay for, or are you just putting the proposals up as soon as their ready?  Do you think any of these proposals should come quicker than others?  I can't help but get the feeling that BTS is getting stretched right now...

CNX is moving more toward the crowd funded feature model rather than the dilution model for future efforts.   We are proposing features in the order that we think will benefit BTS the most. 

Fortunatelly we still have the worker concept .. otherwise non-profit making service provides wouldn't want to "work" here .. For instance: software development, libraries, tech support, ... and many more!!

Whatever business can be run using crowdfunding should do so ... makes sense, and makes fun

[bytemaster]

We have come up with an internal design that we will be submitting for a worker proposal and or revenue sharing crowd funded proposal.   Let me document the details more closely and get an estimated cost in place and we can go from there.

There seems to be quite a few worker proposals coming through, and I'm wondering what sort of role CNX is playing.

Is CNX structuring/scheduling the workers in a way that it thinks BTS can handle and pay for, or are you just putting the proposals up as soon as their ready?  Do you think any of these proposals should come quicker than others?  I can't help but get the feeling that BTS is getting stretched right now...

CNX is moving more toward the crowd funded feature model rather than the dilution model for future efforts.   We are proposing features in the order that we think will benefit BTS the most. 

[lil_jay890]

We have come up with an internal design that we will be submitting for a worker proposal and or revenue sharing crowd funded proposal.   Let me document the details more closely and get an estimated cost in place and we can go from there.

There seems to be quite a few worker proposals coming through, and I'm wondering what sort of role CNX is playing.

Is CNX structuring/scheduling the workers in a way that it thinks BTS can handle and pay for, or are you just putting the proposals up as soon as their ready?  Do you think any of these proposals should come quicker than others?  I can't help but get the feeling that BTS is getting stretched right now...

[bytemaster]

We have come up with an internal design that we will be submitting for a worker proposal and or revenue sharing crowd funded proposal.   Let me document the details more closely and get an estimated cost in place and we can go from there.

[Chronos]

So, has this reached a consensus? Are we going to see negative maker fees in the future?

[okidoki]

No negative interest rates. This would make the current value of the asset 0.

I think the idea of borrowing the money for buy and sell walls close to the feed price paying an interest rate for starting the market is a good idea in combination with the original unregulated market where shorts pay an interest for being short and bitusd receive interest. As Bytemaster says upon improving liquidity this subsidy for buy and sell walls can fall until the market is liquid enough.

200k buy and sell walls would be fantastic (although subsidized initially). BUT IT HAS TO BE COMBINED WITH AN UNREGULATED MARKET IN EVERY OTHER ASPECT!
The feed price should only be there in order to determine who gets a subsidy paid for his open order. If one side has already enough open positions then new open positions do not qualify anymore for the subsidy interest.

Right now it is difficult to follow all the changes which are introduced all the time. I would establish the rule above and leave it like this for at least a year.

[Helikopterben]

Coinbase uses maker/taker model.  It works well.  You can see the bots dance around when you place an order. 

I also like the relative orders idea.

[Empirical1.2]

I like the idea of adding some form of maker/taker model.

Kraken exchange which is the 6/7th crypto exchange by volume recently added maker/taker but I'm unable to find out if their market share has increased as a result. http://blog.kraken.com/post/124345415887/reduced-trade-fees-coming-august-1st

This change comes by popular demand, since many clients have told us they would like to see a maker taker model.

As Johnny Bitcoin mentioned relative orders would be great.

The ability to place relative orders would make the market much more efficient.
It would mean everyone can add liquidity and not have to readjust orders all the time.
By "relative orders" I mean the ability to place orders at the feed price with + or - a percentage that you choose.  The order moves in parallel with the feed.

I haven't use BitAssets 2.0 much but this is why I wouldn't place orders that stay on the books. Because I'm looking to pay a relative price for BitUSD but because of BTS volatility I would have to constantly monitor the order to make sure I don't overpay substantially.

[clout]

Does Cryptonomex plan on settings up a public dev shares chain we can all test these theories on?

I meant to ask that. This will be crucial going forward. It wasn't as beneficial to have a devshare chain in 1.0 but i think that we can learn a great deal by testing our assumptions on a test network.

[Brekyrself]

Does Cryptonomex plan on settings up a public dev shares chain we can all test these theories on?

[Helikopterben]

...the interest is a cost, but it is short term. Eventually...

I'm highly skeptical of this, and like Tony believe the worst thing you could do is penalize holders of BitUSD or BitWhatever.

From "The greatest thing on the face of the crypto-loving planet - interest bearing BitUSD"  --- experiment BitShares 0.X - 0.9 RIP

to "Our BitUSD is so worthless it has build-in inflation - the longer you hold it the less value it has" --- Gee, where can I buy some of that?

This is why I have said all along that the real innovation is not bit-fiat but bit-physical commodity as I described here.  For some reason you guys are hung up on bit-fiat, whereas bit-physical commodity is a completely vertical market with no competition in the crypto space.  I have shown that people are willing to pay a premium for physical commodity derivatives in legacy markets.  Its a hard sell to tell someone they need to pay a premium to own a completely flawed and inherently inflationary digital currency such as bitusd.  However, people will pay a premium to own things of real value such as physical commodities in a digital (derivative) format. 

Smartcoins are a radically new concept and there is a huge learning curve in understanding these things.  For example, if you buy bitusd, then you will pay a premium, but you are guranteed a price floor.   Most users will say that is reduculous and they do not want to pay a premium for usd.  However, they need to understand that they will be able to sell that usd back at a premium close to or at the original premium that they paid (in a conveniently liquid market of course).  There is no difference in buying nubits at $1.00 and selling it back at $1.00 as there is in buying 1 bitusd at $1.10 and selling it back at $1.10.   With bitusd you are guranteed a price floor, with nubits you are not. 

The design is probably very close to being accurate and I don't foresee any real progress being made by tweaking parameters with separate smartcoin assets.  Liquidity is the hurdle that needs to be crossed to achieve mass adoption and its only been a little over a month since 2.0 was launched, so we need to have a little patience.  What is needed is a profitable market-making bot that can take advantage of spreads and premiums in markets that provide the best opportunities, although getting this right would be much easier said than done.  This bot could be funded by a UIA that could distribute profits back to investors or possibly it could be done through a worker proposal.  Nubits has so far gotten this to work, so it can be done.  The only difference is if there bots fail, it causes systemic failure.  If SmartCoin bots fail, no systemic damage is caused.  I think this is the route to take. 

[tonyk]

...the interest is a cost, but it is short term. Eventually...

I'm highly skeptical of this, and like Tony believe the worst thing you could do is penalize holders of BitUSD or BitWhatever.

From "The greatest thing on the face of the crypto-loving planet - interest bearing BitUSD"  --- experiment BitShares 0.X - 0.9 RIP

to "Our BitUSD is so worthless it has build-in inflation - the longer you hold it the less value it has" --- Gee, where can I buy some of that?

I don't claim to be an economist. Perhaps others should follow my lead and seek those with more sound economic experience.

Just saying. Let's not make another knew jerk "correction" until we have research and evidence on which to base the change. I'm not convinced we have that base of experience in house.

No, as a matter of fact I do find the idea of having to pay for the instrument some interest while you hold it, intriguing. And I am not kidding or being sarcastic. But I do believe it is my twisted mind and curiosity, and I do not believe mass adoption is anything close to being garanteed for such a smart (coin???).

[Thom]

...the interest is a cost, but it is short term. Eventually...

I'm highly skeptical of this, and like Tony believe the worst thing you could do is penalize holders of BitUSD or BitWhatever.

From "The greatest thing on the face of the crypto-loving planet - interest bearing BitUSD"  --- experiment BitShares 0.X - 0.9 RIP

to "Our BitUSD is so worthless it has build-in inflation - the longer you hold it the less value it has" --- Gee, where can I buy some of that?

I don't claim to be an economist. Perhaps others should follow my lead and seek those with more sound economic experience.

Just saying. Let's not make another knew jerk "correction" until we have research and evidence on which to base the change. I'm not convinced we have that base of experience in house.

[maqifrnswa]

I wasn't attempting to propose any particular solution, merely to point out that if you want a to encourage liquidity it must be paid for by someone.

Furthermore, I am contemplating a solution to this that doesn't involve dilution.  Think about sharing a cut of all future BitUSD fees with those who provide liquidity in that market early on. 

The early participants to the market are the ones who give it life, the late comers don't benefit from the fees.  In other words, make BitUSD a "profit center" where the profits go to those who make it a successful business.

I don't see that as being a viable solution. You talk about revenue from fees as if it were substantial enough to encourage participation. They simply aren't. Bitshares is too small, and its prospects are meager at best.

I think he's talking about future fees, which may or may not be big.

I'm in favor of using accumulated fees to jump-start the system directly and as simply as possible - what about using the fee pool to set up sell walls or use a worker to buy?

We could fund a worker where some % goes to the operators as a "fee," the rest goes to short walls at feed (or something else). Proceeds from the short wall sales go straight back in to collateral. Whenever the community is happy, the worker can stop and the multisig account can just be sitting short. That account can sit short indefinitely, essentially another reserve account. It can be margin called or force settled, it's fine and doesn't matter -- its roll was to generate smartcoins and any remaining BTS is out of circulation. Another worker proposal can allow the trustees of the account to close out the debt and refund remaining BTS to the reserve account (or fund jumpstarting another market).

[merivercap]

I wasn't attempting to propose any particular solution, merely to point out that if you want a to encourage liquidity it must be paid for by someone.

Furthermore, I am contemplating a solution to this that doesn't involve dilution.  Think about sharing a cut of all future BitUSD fees with those who provide liquidity in that market early on. 

The early participants to the market are the ones who give it life, the late comers don't benefit from the fees.  In other words, make BitUSD a "profit center" where the profits go to those who make it a successful business.

You don't need to screw up bitAssets to play around with parameters. Your system allows to issue any number of different USD. Just set the goal to have the best peg to USD without hurting liquidity and test different schemes on testUSD0, testUSD1...testUSDn, then adapt the one which worked the best for all bitAssets.

I agree it should be easy to try out various Smartcoin designs and if one market does not gain traction and is dying people can vote to have it globally settled at the price feed so people can  switch over to the more liquid one.

When you find the test one that works, why would people stop using it and switch back bitusd? The liquidity would be with the testusd.

Well we can find various ways to transition from one testUSD to another and I would imagine only a couple or at most three will exist.  We should just make it such that the one with the most liquidity can be given the title 'bitUSD' or if they have about the same liquidity just keep it that way.   The title isn't that big a deal either.   I would rather use testUSD that has a better design than a bitUSD that doesn't.   Right now we have no bitUSD liquidity so it's a good time to experiment. 

Also note if we are reaching out to market makers we should ask them about the design.  I would imagine they would want to make money evenly between being long and short in any market, but with our current design most of the money will probably be made going long and force settling in the long run.  Market makers also don't want to trade in illiquid markets so even if they are tempted to skim on unsuspecting shorts they probably will recognize less people will want to trade in the long run and that market making may not be sustainable.  I doubt market markers will want an unbalanced system like that, but who knows.  It's better to recruit and ask.