Author Topic: Radical ideas for liquidity  (Read 11351 times)

0 Members and 1 Guest are viewing this topic.

Offline CoinHoarder

  • Hero Member
  • *****
  • Posts: 660
  • In Cryptocoins I Trust
    • View Profile
Re: Radical ideas for liquidity
« Reply #90 on: February 02, 2016, 03:52:05 pm »
Also, as stated up thread the difference in between my model and the Nubits model...

The Nubits model results in a certain fixed amount of negative dilution paid directly to liquidity providers, but the risk of liquidity operations are put on the users providing the funds for the liquidity operations. Dilution is a certainty to provide liquidity operations.

My model could possibly have smaller (or no) dilution depending on how successful the market making operations are. The funds are provided autonomously by the Bitshares chain, so all shareholders share the risks of market making equally. Only if the operations are unsussesful will Bitshares suffers real dilution.
« Last Edit: February 02, 2016, 04:11:08 pm by CoinHoarder »
https://www.decentralized.tech/ -> Market Data, Portfolios, Information, Links, Reviews, Forums, Blogs, Etc.
https://www.cryptohun.ch/ -> Tradable Blockchain Asset PvP Card Game

Offline Empirical1.2

  • Hero Member
  • *****
  • Posts: 1366
    • View Profile
Re: Radical ideas for liquidity
« Reply #91 on: February 02, 2016, 04:15:13 pm »
keep in mind that right now we have 12,5% inflation from the merger alone plus a max posible of 6,5% from workers and witness budget, trying to save 0,5%(or whatever) would not be wise imo IF those funds could help maintain the peg.

 +5%

Imagine if some of the value the DAC is leaking on the merger was directed to subsidising BitAsset liquidity for 20 months instead

I think BTS would have a MUCH higher value today if we'd focused on BitAsset liquidity for the last year instead of the delegate system and nice to have, but not core Smartcoin related development.
« Last Edit: February 02, 2016, 04:17:01 pm by Empirical1.2 »
If you want to take the island burn the boats

Offline xeroc

  • Board Moderator
  • Hero Member
  • *****
  • Posts: 12915
  • ChainSquad GmbH
    • View Profile
    • ChainSquad GmbH
  • BitShares: xeroc
  • GitHub: xeroc
Re: Radical ideas for liquidity
« Reply #92 on: February 02, 2016, 04:16:16 pm »
[member=16778]CoinHoarder[/member]
So you are proposing to have a deposit account that people can send their BTS to, that will be used to provide liquidity autonomously with a collateral ratio defined by the committee without even "diluting" shareholders more (except maybe to encourage to provide liquidity by a offering a 'yield') .. Is that about correct?
Give BitShares a try! Use the http://testnet.bitshares.eu provided by http://bitshares.eu powered by ChainSquad GmbH

Offline JonnyB

  • Hero Member
  • *****
  • Posts: 636
    • View Profile
    • twitter.com/jonnybitcoin
Re: Radical ideas for liquidity
« Reply #93 on: February 02, 2016, 04:18:23 pm »
- Settlement can be discouraged by asking for a percentage fee (1-2%) (this will move the peg AROUND parity. Flat fee for settlement can also be increase which has some negative effects on pred. markets

 +5%

-The idea that BitUSD was always worth a dollar was good but in practice I think the market would prefer BitAssets to trade around the peg rather than above the peg.

- I think forced settlement at 100% even with the delay can perhaps be manipulated by altering BTS price on external markets.

JohnnyBitcoin previously exploited transwiser via forced settlement & perhaps still has a forced settlement edge given how keen he is on maximising  forced settlement, max daily settlement & was also keen to buy $10k BitUSD recently just above feed? https://bitsharestalk.org/index.php/topic,21096.msg273365.html#msg273365

- I think an actual 1-2% fee could be good as it could then be used to incentivize shorts/other who are the ones that seem the most reluctant to come close to the peg atm.

I think you and a few others have a real misunderstanding of force settlement. Force settling is just a guarantee of liquidity at peg. If people are stupid enough to sell smartcoins for less than what they can be settled for then of course I will buy them and settle at profit. Watch my video at thedex.org for a more detailed explanation.

Weren't you offering to buy the $10k BitUSD in my example for more that it could be force settled at the time?

yes. i wanted to buy some cheap.
I run the @bitshares twitter handle
twitter.com/bitshares

Offline CoinHoarder

  • Hero Member
  • *****
  • Posts: 660
  • In Cryptocoins I Trust
    • View Profile
Re: Radical ideas for liquidity
« Reply #94 on: February 02, 2016, 04:27:30 pm »
[member=16778]CoinHoarder[/member]
So you are proposing to have a deposit account that people can send their BTS to, that will be used to provide liquidity autonomously with a collateral ratio defined by the committee without even "diluting" shareholders more (except maybe to encourage to provide liquidity by a offering a 'yield') .. Is that about correct?

That is certainly one way to go about it. However, dilution is certain and necessary, because you have to incentivize people to take the risks of market making. The yield or incentive percentage can be set by the comittee, so it could be lowered as the exchange gains more "natural liquidity".

I would consider that the "Nubits version" of my proposal, and is not how I originally described it. Both solutions have different pros/cons. I would support either versions of the proposal because I think liquidity is a big issue.

I guess I don't have an opinion either way, but if more people would be able to get behind the Nubits version of the proposal, then I would be all for it.
https://www.decentralized.tech/ -> Market Data, Portfolios, Information, Links, Reviews, Forums, Blogs, Etc.
https://www.cryptohun.ch/ -> Tradable Blockchain Asset PvP Card Game

Offline gamey

  • Hero Member
  • *****
  • Posts: 2253
    • View Profile
Re: Radical ideas for liquidity
« Reply #95 on: February 02, 2016, 04:53:32 pm »

Curiously can anyone give references to these sort of things working in the past?  I understand BitShares is a new product in many many ways so it is hard to find an example that fits very well, but I would think there should be something out there.

I wonder if the better solution could be more within education. I don't think education is a great idea, but I question whether paying liquidity providers will be enough to jumpstart the system ... and if it isn't (which seems likely) you have now spent your war chest.
I speak for myself and only myself.

Offline CoinHoarder

  • Hero Member
  • *****
  • Posts: 660
  • In Cryptocoins I Trust
    • View Profile
Re: Radical ideas for liquidity
« Reply #96 on: February 02, 2016, 05:00:36 pm »
It has worked for Nubits for over a year.. and they have had much more volume than Bitshares' DEX has had.
« Last Edit: February 02, 2016, 05:02:32 pm by CoinHoarder »
https://www.decentralized.tech/ -> Market Data, Portfolios, Information, Links, Reviews, Forums, Blogs, Etc.
https://www.cryptohun.ch/ -> Tradable Blockchain Asset PvP Card Game

chryspano

  • Guest
Re: Radical ideas for liquidity
« Reply #97 on: February 02, 2016, 05:14:34 pm »

Curiously can anyone give references to these sort of things working in the past?  I understand BitShares is a new product in many many ways so it is hard to find an example that fits very well, but I would think there should be something out there.

I wonder if the better solution could be more within education. I don't think education is a great idea, but I question whether paying liquidity providers will be enough to jumpstart the system ... and if it isn't (which seems likely) you have now spent your war chest.

I only know about Nubits and they "print" more nubits out of thin air(this is very bad imo) in order to pay the liquidity providers with the 8% Coihoarder mentioned above, it seems to work until now but there is another problem with them, every time new suckers buy nubits, a large percentage of the suckers money are considered "Profits" and are used to pump their nushares  ponzishares. IF there is going to be a huge supply of nubits that threatens the peg, then and only then they will inflate their ponzishares supply (because every week they use lots of the sucker's BTC's as "profits"), despite all that it seems that they have a very good peg so far. If it works with them why not for us? 

Worst case scenario we will have to abord if we see that it does't  work, I think we will loose more time and energy than bts 

Disclaimer
I'm completly biased against nubits.

Offline Empirical1.2

  • Hero Member
  • *****
  • Posts: 1366
    • View Profile
Re: Radical ideas for liquidity
« Reply #98 on: February 02, 2016, 05:30:53 pm »

Curiously can anyone give references to these sort of things working in the past?  I understand BitShares is a new product in many many ways so it is hard to find an example that fits very well, but I would think there should be something out there.

I wonder if the better solution could be more within education. I don't think education is a great idea, but I question whether paying liquidity providers will be enough to jumpstart the system ... and if it isn't (which seems likely) you have now spent your war chest.

Nubits despite being far more risky than BitUSD, and will probably fail, is much more popular through the use of liquidity providers.
They probably average >$1 million a month in volume and have much bigger market share.

https://uphold.com/ Uphold started after BTSX and offer centralized BitAssets which are much less appealing to Bitcoin users, however they offer a tight peg by being the liquidity providers themselves. As a result they are "supposedly" the fastest growing money platform in the world.

Part of the problem is that in these market conditions & with the added burden of forced settlement, shorts don't want to come close to the peg resulting in a very high premium, so long term this has to be addressed too, possibly by incentivizing shorts in BTS neutral/bear markets imo.
« Last Edit: February 02, 2016, 05:32:55 pm by Empirical1.2 »
If you want to take the island burn the boats

Offline Shentist

  • Board Moderator
  • Hero Member
  • *****
  • Posts: 1601
    • View Profile
    • metaexchange
  • BitShares: shentist
Re: Radical ideas for liquidity
« Reply #99 on: February 02, 2016, 05:37:53 pm »

Curiously can anyone give references to these sort of things working in the past?  I understand BitShares is a new product in many many ways so it is hard to find an example that fits very well, but I would think there should be something out there.

I wonder if the better solution could be more within education. I don't think education is a great idea, but I question whether paying liquidity providers will be enough to jumpstart the system ... and if it isn't (which seems likely) you have now spent your war chest.

Nubits despite being far more risky than BitUSD, and will probably fail, is much more popular through the use of liquidity providers.
They probably average >$1 million a month in volume and have much bigger market share.

https://uphold.com/ Uphold started after BTSX and offer centralized BitAssets which are much less appealing to Bitcoin users, however they offer a tight peg by being the liquidity providers themselves. As a result they are "supposedly" the fastest growing money platform in the world.

Part of the problem is that in these market conditions & with the added burden of forced settlement, shorts don't want to come close to the peg resulting in a very high premium, so long term this has to be addressed too, possibly by incentivizing shorts in BTS neutral/bear markets imo.

you are saying "Nubits have a much bigger market share" on which data is this assumtion based? To me it looks, the tradevolume is only the market maker who recieved a lot of funds in the beginning for free. thats all i see.

Offline Empirical1.2

  • Hero Member
  • *****
  • Posts: 1366
    • View Profile
Re: Radical ideas for liquidity
« Reply #100 on: February 02, 2016, 05:40:02 pm »

Curiously can anyone give references to these sort of things working in the past?  I understand BitShares is a new product in many many ways so it is hard to find an example that fits very well, but I would think there should be something out there.

I wonder if the better solution could be more within education. I don't think education is a great idea, but I question whether paying liquidity providers will be enough to jumpstart the system ... and if it isn't (which seems likely) you have now spent your war chest.

Nubits despite being far more risky than BitUSD, and will probably fail, is much more popular through the use of liquidity providers.
They probably average >$1 million a month in volume and have much bigger market share.

https://uphold.com/ Uphold started after BTSX and offer centralized BitAssets which are much less appealing to Bitcoin users, however they offer a tight peg by being the liquidity providers themselves. As a result they are "supposedly" the fastest growing money platform in the world.

Part of the problem is that in these market conditions & with the added burden of forced settlement, shorts don't want to come close to the peg resulting in a very high premium, so long term this has to be addressed too, possibly by incentivizing shorts in BTS neutral/bear markets imo.

you are saying "Nubits have a much bigger market share" on which data is this assumtion based? To me it looks, the tradevolume is only the market maker who recieved a lot of funds in the beginning for free. thats all i see.

Last time I checked the amount of Nubits in circulation is much higher than BitUSD...

Uphold: $2.06 Million
Tether: $1.45 Million
Nubits: $0.76 Million
BituSD: $0.1  Million

So going by that I would say we only have 2.5% market share.  Their volume is also much, much higher than BitUSD.

Also even though they're created out of thin air, they're not given for free, otherwise they wouldn't have been able to distribute $400 000 in dividends in 2015 from the proceeds and fund the exchange they are currently building.

Quote
$409,811 have been distributed as dividends2 over the last year, most of which was as BlockShares. Given the current NuShare market cap of $1,628,335, that is a stunning 25.17% dividend yield.

https://discuss.nubits.com/t/how-many-dividend-distributions-has-nushares-had-will-there-be-any-more/2739/3
« Last Edit: February 02, 2016, 05:48:34 pm by Empirical1.2 »
If you want to take the island burn the boats

Online abit

  • Committee member
  • Hero Member
  • *
  • Posts: 4509
    • View Profile
    • Abit's Hive Blog
  • BitShares: abit
  • GitHub: abitmore
Re: Radical ideas for liquidity
« Reply #101 on: February 02, 2016, 05:46:45 pm »

Curiously can anyone give references to these sort of things working in the past?  I understand BitShares is a new product in many many ways so it is hard to find an example that fits very well, but I would think there should be something out there.

I wonder if the better solution could be more within education. I don't think education is a great idea, but I question whether paying liquidity providers will be enough to jumpstart the system ... and if it isn't (which seems likely) you have now spent your war chest.

I only know about Nubits and they "print" more nubits out of thin air(this is very bad imo) in order to pay the liquidity providers with the 8% Coihoarder mentioned above, it seems to work until now but there is another problem with them, every time new suckers buy nubits, a large percentage of the suckers money are considered "Profits" and are used to pump their nushares  ponzishares. IF there is going to be a huge supply of nubits that threatens the peg, then and only then they will inflate their ponzishares supply (because every week they use lots of the sucker's BTC's as "profits"), despite all that it seems that they have a very good peg so far. If it works with them why not for us? 
Imo those "Profits" should be "Revenues". What will happen if those bought nubits be sold back?
Quote

Worst case scenario we will have to abord if we see that it does't  work, I think we will loose more time and energy than bts 

Disclaimer
I'm completly biased against nubits.
BTS account: abit
BTS committee member: abit
BTS witness: in.abit

Offline Shentist

  • Board Moderator
  • Hero Member
  • *****
  • Posts: 1601
    • View Profile
    • metaexchange
  • BitShares: shentist
Re: Radical ideas for liquidity
« Reply #102 on: February 02, 2016, 05:47:26 pm »
[member=32211]Empirical1.2[/member]

thats true, but as i stated, are you aware that most of this nubits are from the marketmaker and not from demand, so i think it is difficult to look into the trading volumen (because the market maker are exchanges and shuffling the nubits for free). i think a much better way would be to know how the nubits are allocated. On the nuexplorer you can find the 100 richest addresses https://blockexplorer.nu/topNBTaddresses/1

and i am confused, their should be 6-7 million Nubits bur coinmarketcap states 700.000 so why is the difference so huge?

Offline Empirical1.2

  • Hero Member
  • *****
  • Posts: 1366
    • View Profile
Re: Radical ideas for liquidity
« Reply #103 on: February 02, 2016, 05:52:01 pm »
[member=32211]Empirical1.2[/member]

thats true, but as i stated, are you aware that most of this nubits are from the marketmaker and not from demand, so i think it is difficult to look into the trading volumen (because the market maker are exchanges and shuffling the nubits for free). i think a much better way would be to know how the nubits are allocated. On the nuexplorer you can find the 100 richest addresses https://blockexplorer.nu/topNBTaddresses/1

and i am confused, their should be 6-7 million Nubits bur coinmarketcap states 700.000 so why is the difference so huge?

Initially they had some crazy volume on bter but I don't think they are shuffling the Nubits for free anymore unless they have a deal with the exchanges to not pay the trading fee. Also demand for Nubits explodes when BTC is falling, which is expected so I don't think their volume is fake.

I think they sell Nubits to market makers when there is increased market demand possibly at a discount depending on how they subsidize them but I don't know & I also don't know why there is such a huge discrepancy.


Curiously can anyone give references to these sort of things working in the past?  I understand BitShares is a new product in many many ways so it is hard to find an example that fits very well, but I would think there should be something out there.

I wonder if the better solution could be more within education. I don't think education is a great idea, but I question whether paying liquidity providers will be enough to jumpstart the system ... and if it isn't (which seems likely) you have now spent your war chest.

I only know about Nubits and they "print" more nubits out of thin air(this is very bad imo) in order to pay the liquidity providers with the 8% Coihoarder mentioned above, it seems to work until now but there is another problem with them, every time new suckers buy nubits, a large percentage of the suckers money are considered "Profits" and are used to pump their nushares  ponzishares. IF there is going to be a huge supply of nubits that threatens the peg, then and only then they will inflate their ponzishares supply (because every week they use lots of the sucker's BTC's as "profits"), despite all that it seems that they have a very good peg so far. If it works with them why not for us? 
Imo those "Profits" should be "Revenues". What will happen if those bought nubits be sold back?

What's interesting is that they have a parking rate system that is supposed to pay people to park their Nubits in situations where lots of people want to sell Nubits but despite their super fractional reserve I don't think they've really had to use it yet. So it makes you think they could carry on with this system for quite a while..
« Last Edit: February 02, 2016, 06:00:03 pm by Empirical1.2 »
If you want to take the island burn the boats

Offline CoinHoarder

  • Hero Member
  • *****
  • Posts: 660
  • In Cryptocoins I Trust
    • View Profile
Re: Radical ideas for liquidity
« Reply #104 on: February 02, 2016, 06:58:07 pm »
To me it looks, the tradevolume is only the market maker who recieved a lot of funds in the beginning for free. thats all i see.

Most of that was burned and does not exist anymore. The info regarding that is on Nubits' forums.
« Last Edit: February 02, 2016, 07:01:47 pm by CoinHoarder »
https://www.decentralized.tech/ -> Market Data, Portfolios, Information, Links, Reviews, Forums, Blogs, Etc.
https://www.cryptohun.ch/ -> Tradable Blockchain Asset PvP Card Game