[poll] Should we use a worker proposal to reduce the premium for bitassets?

[Musewhale]

, great, good idea, i like it, just do it!

[abit]

Use some fund to make a bot on Polo's bitCNY/BTC pair，manually bump the volume there if no one was trading, we will get eye balls. I already have a worker proposal for the latter. If the bot operates at a slight loss, maybe no need the manually bump, people like free money (by hedging between Dex and polo)

[bitcrab]

I don't think worker proposal should be used to do the things such as market making for a specific BitAsset, system should only define rules.

[valtr]

I thing that spread on bitUSD/USD is too wide and we may have payment systems able to accept it, but people willing to use it will not be able to obtain it at reasonable price.
The worker proposal may help.

[xeroc]

Exactly. I would 100% unequivocally buy 1 Nubit before buying 1 bitUSD, because it is way more likely that there will be someone to buy it back close to parity whenever I happened to want to sell it.

@CoinHoarder Are you aware of the Forced Settlement feature inside Bitshares? It allows the holder of a smartcoin like BitUSD to convert back to BTS at 99% of the price feed.

I'm interested to hear what @bytemaster thinks of the idea of committee-owned short sales at some fixed percentage above the price feed.

Settlememt is at exactly feed price (100%)

[xeroc]

I think the members who manage the account should be a separate committee or sub-committee of members who are  dedicated to just managing this. They should be experience traders who primary responsibility is managing the spread. This way there is no conflict with any other responsibilities they will have

How about an account OWNED by the committee account but with ACTIVE authority being a set of 5 traders or so .. (threshold 2-4)

[xeroc]

You need to also realize that a workee that pays to the committe does not 'really' result in an extra 'dilution' since the funds cannot easily leave the system as sell pressure on polo .. the workers pay will stay in the system and may even make some profit for the dex ..
Fast forward some months, those profits could be burned again

I've been trying to reason through the math of that. 

Let's say we create  a worker proposal for $30k worth of bts.  We then use that to short $10k USD.  We then sell that $10k USD for $10k worth of bts. 

Result is not net inflationary right? $10k USD on the market plus $30k USD as collateral.  I think I must be missing something through.

Depends what supply you look at ..

BTS supply is increases by 30k from worker and reduced by 30k when using it as collateral .. with a collateral ratio of 3 .. you increase the bitusd supply by 10k

[Pheonike]

I think the members who manage the account should be a separate committee or sub-committee of members who are  dedicated to just managing this. They should be experience traders who primary responsibility is managing the spread. This way there is no conflict with any other responsibilities they will have

[BunkerChainLabs-DataSecurityNode]

You need to also realize that a workee that pays to the committe does not 'really' result in an extra 'dilution' since the funds cannot easily leave the system as sell pressure on polo .. the workers pay will stay in the system and may even make some profit for the dex ..
Fast forward some months, those profits could be burned again

I've been trying to reason through the math of that. 

Let's say we create  a worker proposal for $30k worth of bts.  We then use that to short $10k USD.  We then sell that $10k USD for $10k worth of bts. 

Result is not net inflationary right? $10k USD on the market plus $30k USD as collateral.  I think I must be missing something through.

It's profitable when you factor in transactions I think.

What it does take away from is other development elements that require worker funding.

[puppies]

You need to also realize that a workee that pays to the committe does not 'really' result in an extra 'dilution' since the funds cannot easily leave the system as sell pressure on polo .. the workers pay will stay in the system and may even make some profit for the dex ..
Fast forward some months, those profits could be burned again

I've been trying to reason through the math of that. 

Let's say we create  a worker proposal for $30k worth of bts.  We then use that to short $10k USD.  We then sell that $10k USD for $10k worth of bts. 

Result is not net inflationary right? $10k USD on the market plus $30k USD as collateral.  I think I must be missing something through.

[xeroc]

You need to also realize that a workee that pays to the committe does not 'really' result in an extra 'dilution' since the funds cannot easily leave the system as sell pressure on polo .. the workers pay will stay in the system and may even make some profit for the dex ..
Fast forward some months, those profits could be burned again

[BunkerChainLabs-DataSecurityNode]

If we don't get Smartcoins closer to a 1% peg you will never get utility out of them and everyone who comes to bitshares is going to end up just creating their own UIAs and smartcoins because the system bitassets are simply too expensive to consider using.

That's my take on it anyways. I haven't seen any reason for driving the premiums up on Smartcoins even beyond 5%+ as has happened other than because we have so little volume some people could and thus profit from the situation in the DEX market...  while those few who attempted to buy and use them would just get screwed.

If you are looking to buy them for holding value, what good is it if you are paying/losing 10%+ doing that?

If you are trying to use it as a currency for its counterparty (ie. bitUSD) how do you justify paying 10 cents on every dollar more than the real counterparty value?

At on time I had some customers who wanted to pay us for hosting in BTC in bitUSD instead at my request. The result was continued issues with collection because the premium was SO far from what the value of the BTC was that they were sending to convert to bitUSD at the time due to the premium taking 15%+ of the balance off what was being shown as the value of the BTC in USD on Coinbase. I was forced to contact them and instruct them to send more because the difference sometimes was hundreds of dollars short of their invoice due.

Any business that might consider using these Smartcoins would quickly start getting negative feedback from their customers about this, and any merchants who look into them and see this likely are stopped from adopting them for this very reason knowing that they will have customers upset with paying an extra 10 cents on very dollar.. for what? Because traders in an illiquid market made it that way. Good for trader, bad for utility and adoption.

Some would argue that merchants can short Smartcoins, but really, unless their business revolves around the Smartcoin with lots of BTS to just lockup that is a huge barrier to entry.

It seems like it depends what you think Smartcoins should be used for that will determine what you think should happen with them.

As a merchant I can accept a 1% spread from the peg along with other transaction charges to consider it accepted as a payment method (assuming there is an offramp for me to be able to convert to real counterparty Smartcoins to pay the bills etc). Once you get beyond that.. even credit card companies would charge at most 2.5% spread on currency exchanges (in my part of the world anyways), and transaction charges are getting closer to 1% on top of that (except for paypal.. thats just going up).

I believe it is generally perceived that one of the selling points of crypto/smartcoins is that we have a network that is more efficient and sercure than banks, and therefore we have assets that can be transacted for equal to or less than them. In this case though, the cost of dealing in bitassets are not competitive and therefore make no business sense to use them.

I am not a trader (I have said this before) so my outlook on bitassets is more on the side of their practical use and utility. I understand though that for traders unless there is a bigger spread there is no reason to create the markets with such little volume. The idea from what I understand is that once there is more demand/volume that the spread will become closer to the peg. I have just illustrated the chicken/egg situation that is preventing demand from happening through utility so I hope that if this does come into effect we might start to see that tighter spread that would make bitAssets worth using for businesses.

Otherwise you can expect Smartcoins to become continually fractioned into multiple private assets and thus diluting demand on the network bitAssets ongoing. That would not be so bad either really. The fractioned markets would occur with the bitAssets markets only becoming something to trade but not what businesses should/would use for any utility.

I could be missing something in regards to trading at such high premiums too.. so if there is something I have missed feel free to give input.

[puppies]

Exactly. I would 100% unequivocally buy 1 Nubit before buying 1 bitUSD, because it is way more likely that there will be someone to buy it back close to parity whenever I happened to want to sell it.

@CoinHoarder Are you aware of the Forced Settlement feature inside Bitshares? It allows the holder of a smartcoin like BitUSD to convert back to BTS at 99% of the price feed.

I'm interested to hear what @bytemaster thinks of the idea of committee-owned short sales at some fixed percentage above the price feed.

I am also interested in what @bytemaster thinks of the committee going short assets.  I am pretty confident he is aware of the discussion that has been going on.   I would guess that he is trying to allow the "community" to come to a consensus without his input.

Whatever your opinion of BM and his role in BTS.  If you refuse to accept that he has a keen intellect then I would have to question your motives. 

With that said.  I am warming to the idea of allowing an account other than the commitee-account to control these funds.

The upside of only allowing the committee account to create these shorts would in my opinion be.  That if we didn't like the way things were being run, we could vote out those responsible and assuming we could vote in a group that would do as we wished we could reclaim those funds.  The downside is the increased difficulty of creating and approving transaction of the committee-account, and the increased scrutiny, and threat that the committee account holding tens or hundred of thousands of dollars of assets would bring.

The upside of using a different multi key account is largely the inverse.   What is changing my mind though is the wish to prevent the committee account from being a position that it is worthwhile attacking. 

[Chronos]

Exactly. I would 100% unequivocally buy 1 Nubit before buying 1 bitUSD, because it is way more likely that there will be someone to buy it back close to parity whenever I happened to want to sell it.

@CoinHoarder Are you aware of the Forced Settlement feature inside Bitshares? It allows the holder of a smartcoin like BitUSD to convert back to BTS at 99% of the price feed.

I'm interested to hear what @bytemaster thinks of the idea of committee-owned short sales at some fixed percentage above the price feed.

[CoinHoarder]

Nubits is just a little bit under the market value of Nushares, so what will happen when some whale will dump Nushares and the value will drop below that?

i don't get it how they will solve this problem, but anyway in my understanding most of the nubits are holded by liquidityprovider and not so much with users.

The way I understand it, the Nushares price doesn't really matter (for the peg to work any ways). Reading the full Whitepaper is a great way to learn exactly how it works... it is kind of complicated to explain like Smartcoins. The main danger of Nushares/Nubits is that the demand for Nubits declines and has no potential to increase in the future.

While Bitcoin is a first generation cryptoasset, Peercoin was the beginning of the second generation defined by proof of stake. Nu heralds a third generation of cryptoassets featuring stable value managed by shareholders. Will there be a fourth generation? Likely. I do not yet know what will be its defining characteristics, when it will arrive or whether it will make Nu obsolete. Nu is more adaptable than Bitcoin or Peercoin with its voting mechanisms and shareholders are likely to devote considerable revenues to updating it as well as research and development. While I believe the system can likely be sustained for a very long time, it would be foolish to believe it could last forever, as in century after century. Someday it will be replaced by a superior system based on technology not foreseeable today.

When this occurs, NuBit demand will decline permanently. The end of the currency will be marked by interest rates rising to unprecedented highs and then going still higher until the vast majority of NuBits are parked. When market participants reach a unanimous consensus that NuBits are worthless, then they will suddenly drop to zero value from one USD. As long as a small group of speculators believe there is even a small chance NuBit demand will reach a new all time high the price will remain one USD. As the currency shows signs of stress and serious decline in levels of use NuBits will pass from ordinary businesses and people to speculators willing to take large risks for large rewards. Ownership of NuBits will centralize somewhat as the currency shows signs of stress. Failure of the currency is not synonymous with failure of the network. If there are other currencies offered by Nu, they will continue to be unaffected.

In the space between now and obsolescence, there is much that Nu can do to benefit shareholders and its users.

Finally, it should be noted that Nu is experimental software at this point. It may not work as intended. However, shareholders will be tenacious in repairing any defects that are found.

If you go through the tabs on this page it will give you a good idea how Nubits works: https://nubits.com/about/overview
Chronos' videos are good too: https://www.youtube.com/playlist?list=PLUiLNR0BnZBbQy8UjB263sw13ANLPCxK_
Forums are enlightening as well, specifically the liquidity, nushares, and nubits sections: https://discuss.nubits.com/c/Liquidity

I'm tired of the "liquidity will increase because adoption will increase" state of mind that has been instilled in this community for the past couple years, and I think Bitshares can take a page out of Nushare's book. Namely, paying "custodians" to provide liquidity on the Smartcoin market.