Author Topic: Radical ideas for liquidity  (Read 11347 times)

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Offline JonnyB

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Radical ideas for liquidity
« on: January 27, 2016, 08:21:51 pm »
The dex is not a decentralized exchange without a functioning smartcoin. Trading UIAs is nice but can be done faster and cheaper on poloniex.
We are 4 months in to bts 2.0 and none of the smartcoins are liquid. Something big needs to change.
People keep saying we just need a bridge to smartcoins but nobody will provide that bridge without liquidity
Here are some radical ideas of how to increase liquidity.

- The committee or a worker proposal should use reserve pool funds to create smartcoins and sell them in to the market at feed price plus 10%
- Abandon all smartcoins except BitUSD to drive liquidity to it and then think about adding another smartcoin in a years time.
- Get all gateways to offer the same btcUIA instead of each having their own separate ones. Could be a multisig wallet controlled by committee.
- Get the reserve pool to pay for a bitcoin-BitBTC bridge with guaranteed 2-way liquidity
- Limit trading pairs in the GUI to just USD vs XXX
- Buy an existing exchange like poloniex and migrate its backend over to bitshares.
- Pay some altcoins that are struggling but have big communities to migrate their coins over to bitshares through proof of burn.

Loads of people are going to moan about these ideas but we need to prove a smartcoin works.
The trading volume of USD:BTC over the last 24hrs is actually zero as it is on most days.
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Offline kenCode

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Re: Radical ideas for liquidity
« Reply #1 on: January 27, 2016, 08:28:32 pm »
"Abandon all smartcoins except BitUSD to drive liquidity to it and then think about adding another smartcoin in a years time."
Definitely NOT. We don't use Dollars over here in Europe and neither does China.
 
The POS systems need AT LEAST those top 3 as liquid choices:
https://www.youtube.com/watch?v=GMECm8bqKaE&index=5&list=PLjbx3qSmDe7RYkRMIEuFyYyG7_vvKgou0
 
The free market UIA's will also become liquid as demand increases.
Just because it's slow to grow doesn't mean it's broke.
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Offline Shentist

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Re: Radical ideas for liquidity
« Reply #2 on: January 27, 2016, 08:34:01 pm »
its nice to see someone is thinking outside the box!

i will anyone tell, just move some assets from other exchanges into bitshares, we have now multiple ways to do it.

i think "maker" will help here, because at the moment everyone is complaining, but no one is responsible for liquidity.

which exchanges would you buy? i think we are not so rich :D

and just to hijack your thread

i proposed a new trading type here: https://bitsharestalk.org/index.php/topic,21110.15.html

i think we should also increase what we can offer.

Offline JonnyB

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Re: Radical ideas for liquidity
« Reply #3 on: January 27, 2016, 08:42:20 pm »
"Abandon all smartcoins except BitUSD to drive liquidity to it and then think about adding another smartcoin in a years time."
Definitely NOT. We don't use Dollars over here in Europe and neither does China.
 
The POS systems need AT LEAST those top 3 as liquid choices:
https://www.youtube.com/watch?v=GMECm8bqKaE&index=5&list=PLjbx3qSmDe7RYkRMIEuFyYyG7_vvKgou0
 
The free market UIA's will also become liquid as demand increases.
Just because it's slow to grow doesn't mean it's broke.

I live in Europe too. I don't think smartcoins are broke I just think we need to walk before we can run.
The biggest bitcoin exchange Bitstamp is based in europe, it trades in dollars not euros.
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Offline Akado

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Re: Radical ideas for liquidity
« Reply #4 on: January 27, 2016, 09:47:56 pm »
- The committee or a worker proposal should use reserve pool funds to create smartcoins and sell them in to the market at feed price plus 10%

Like I've stated a couple of times, I thought when the committee proposal was approved this was to be done immediately, however we've seen nothing so far, apparently a few bugs/exploits were discovered and the committee is focusing on them atm, postponing this. It should have been done already if the proposal was approved though. There were a few topics about that at the time with plenty of discussion and imo that should have been discussed at that time by the committee before they approved it... Meaning we have to wait till they fix whatever needs to be fixed first.

I also agree on exchanges having all the same asset instead of multiple different ones, but I guess it's up to them and their business model. Everyone's free to do whatever they want but I think atm what you suggested really is the solution. We have to start somewhere, it's much better having a solid market than having dozens of iliquid markets, it just doesn't make sense atm, we're too small for that, there's no competition for that yet. First we need to make BitShares "usable", only then should other businesses think about that, because without BitShares working first, their assets will still be useless with no liquidity.

As for focusing solely on USD... I'm divided there. I really think that it isn't a problem for EUR. Gateways just need to convert it. [member=30868]kenCode[/member] instead of your customers seeing 5 dollars, you make the conversion and they see 4.80 euros, it's just a matter of adding/subtracting the different that there is between EUR and USD I think. Users see EUR but really they're using USD, just like an inflated IOU. Unless EUR/USD suffers a huge change and the ratio drastically changes I don't see a problem with that. Just make it appear in EUR and 20 or 15% cheaper or whatever's the difference between USD and EUR.
Now the part I was divided is because I also think we need CNY. We need the support of the chinese community back. We can't dismiss them.

Other solution I think is simply having normal markets like all exchanges. Instead of having every single asset traded against BTS, why not just do it against BTC like people are used to? And main markets also traded against USD/CNY.

DASH/BTC
DOGE/BTC
LTC/BTC
BTS/BTC
METAFEES/BTC
OPENPOS/BTC
USD/BTC
USD/BTS
CNY/BTC
CNY/BTS

that's it. also having those assets be the same. Meaning the same btc used by openledger and other exchanges, same usd too, etc. This way instead of having 20 or 30 useless pairs we have 10 that are a little more solid and what people are used to. It also doesn't give a good image for the outside when people see a bunch of markets, all with no volume, it seems like a mess. This could help reduce that.
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Offline Shentist

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Re: Radical ideas for liquidity
« Reply #5 on: January 27, 2016, 10:01:11 pm »
i understand why you guys want 1 coin to rule them all, but in reality every exchange will use their own coins, because they need to have
control what they are promising their customers. we as metaexchange can not take responsible of an openledger coin and if something happens to them or us,
everyone on the bitshares exchange will be hurt. so i think it is really a problem, but in the longrun bitshares get more from more unic partners.

we are trying to give our pairs some liquidity an providing at the moment support for this pairs:

https://bitshares.org/wallet/#/market/METAEX.BTC_BTS
https://bitshares.org/wallet/#/market/METAEX.BTC_BTC
https://bitshares.org/wallet/#/market/METAEX.BTC_OPENMUSE

so the idea is the same, most of the traders are used to look into BTC value, so we are trying to make METAEX.BTC pairs as liquid as possible. bitBTC is to illiquid to get this done - at least at the moment.

Offline JonnyB

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Re: Radical ideas for liquidity
« Reply #6 on: January 27, 2016, 10:05:15 pm »
Maybe the committee could create and offer the main gateways a straight swap for their existing IOUBTCs to BitBTC.


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Offline abit

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Re: Radical ideas for liquidity
« Reply #7 on: January 27, 2016, 10:34:01 pm »
Maybe the committee could create and offer the main gateways a straight swap for their existing IOUBTCs to BitBTC.
Jonny, why don't you join the committee? Then you can do what you want.
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Offline BunkerChainLabs-DataSecurityNode

Re: Radical ideas for liquidity
« Reply #8 on: January 28, 2016, 01:58:34 am »
The trading volume of USD:BTC over the last 24hrs is actually zero as it is on most days.

I like some of the ideas you suggested.. however this market you mentions has been made this way because the premium from what I understand is in the neighbourhood of 40% from market rate. Someone claimed to have done that to lock up the market so that they could profit from it.

Free market sure.. but when traders take advantage of the illquid markets and push the premiums far beyond any reasonable amount, they are effectively killing it. They poison the supply and thus destroy the demand.

I'm not a trader... but I have heard it time and again from people that the market pegs are so far off that they simply do not want to use smartcoins because it will cost too much.

People WANT to... but when they get into the market and see premiums that reach 10% plus.. it no longer makes sense to use them for their purpose, which is to be a stable reserve. Not at that premium. Utility is destroyed.

If you want to see more liquidity.. keep the premium within 3%. Sure you are not going to see massive gains on a few trade.. but smaller ones on a whole lot more.

All the other solutions where the system is introducing more money is effectively going to just give the same players who have set the premium too high to buy up any cheaper amounts and keep setting them higher isn't it? Then we are back to where people simply will not pay the premium and the market remains illiquid aren't we? Or is there something I am missing... again I am not a trader.

I think traders have to decide by their trades if they want to support the markets or not by the premiums they are setting. Otherwise we can see the result.  Again though.. this is what it seems from someone who isn't a trader.. if I a missing something let me know.

Aside from this.. the current markets as released in 2.0 I don't believe were meant to operate this way. Bond markets were suppose to be part of the equation for the launch of 2.0. Since we don't have that though we need to look at other options. I think some of the recent ideas are pretty decent..

N - same problem only bigger, but we are about to do a run anyways and we will see what happens - The committee or a worker proposal should use reserve pool funds to create smartcoins and sell them in to the market at feed price plus 10%
N - systemically impossible - Abandon all smartcoins except BitUSD to drive liquidity to it and then think about adding another smartcoin in a years time.
N - free market for gateways.. do we hire goons to enforce? :) - Get all gateways to offer the same btcUIA instead of each having their own separate ones. Could be a multisig wallet controlled by committee.
Y - I already have started working on this - Get the reserve pool to pay for a bitcoin-BitBTC bridge with guaranteed 2-way liquidity
Y - An easy enhancement - Limit trading pairs in the GUI to just USD vs XXX
Y - Acquisition is one way to get customers, but a deal like that can take a long time, and the cost of conversion tremendous - Buy an existing exchange like poloniex and migrate its backend over to bitshares.
N - Invites are ok though.. paying alts would produce diminished returns and do nothing for the target markets - Pay some altcoins that are struggling but have big communities to migrate their coins over to bitshares through proof of burn.

Akado concurred with the whole limited markets in GUI idea too. I don't think they need to be 100% limited, but they can be made more prominent... like on ohh.. say.. THEDEX! :)
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Offline CoinHoarder

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Re: Radical ideas for liquidity
« Reply #9 on: January 28, 2016, 02:45:45 am »
[member=37127]JonnyBitcoin[/member]

You and I have a different definition of radical.... those ideas seem rather tame to me.   :P

I have been cooking this idea in my brain that is as radical as radical gets. I think it would work without much blowback....

A. Bitshares needs to autonomously print BTS specifically to fund this feature
B. Bitshares shorts every SmartCoin, and puts them up for sale 10% over the price feed (the percentage and collateral amount can be set by the committee)
C. The amount of liquidity provided by this feature is set bet the committee (for example... $25,000 per SmartCoin 10% above the peg)
D. If/when the liquidity pool for any certain SmartCoin is running low, Bitshares autonomously prints more BTS so that the amount of liquidity set by the committee is maintained.
E. Instant liquidity is observed across all SmartCoin markets
F. Unintended benefit: Bitshares' position on Coinmarketcap is bolstered, so as to make sure we stay in the spotlight for at least another year or so. I think the coming year (or two) is very important for the future success of cryptocurrencies... we do not want to fall behind and out of the spotlight.

But... but... Coinhoarder....
A. Dilution will lower the value of BTS - The dilution for this feature would not lower the value of the BTS token, as it does not effect the demand. The supply on "paper" increases, but that supply never makes its way into the market. So, no downward pressure is ever applied onto the market from the BTS printed.
B. Smartcoins will no longer work on free market dynamics - This is why I suggest a wide (but snug) 10% peg. A 10% peg leaves a lot of wiggle room for profiteers or market makers to come along and naturally tighten the peg more so. The amount can be adjusted as needed, so it can start at a 5% peg until liquidity/adoption reaches a certain point, then it can be relaxed to 6%, then 7%, etc... as the market matures the percentage can increase and the "training wheels" taken off.
C. This seems very risky - Not if it is fully planned, peer reviewed, and everything is done autonomously by the blockchain.
D. What if the funds get margin called - Considering we are shorting with printed BTS, we can short with a very high percentage of collateral. Thus, it is unlikely a margin call ever occurs. If one does occur after setting an astronomical amount of collateral, then the BTS value is in the gutter of the gutter already, and Bitshares is already in dire straights (or likely dead.)
« Last Edit: January 28, 2016, 03:00:43 am by CoinHoarder »
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Offline fav

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Re: Radical ideas for liquidity
« Reply #10 on: January 28, 2016, 06:10:00 am »
The dex is not a decentralized exchange without a functioning smartcoin. Trading UIAs is nice but can be done faster and cheaper on poloniex.
We are 4 months in to bts 2.0 and none of the smartcoins are liquid. Something big needs to change.
People keep saying we just need a bridge to smartcoins but nobody will provide that bridge without liquidity
Here are some radical ideas of how to increase liquidity.

- The committee or a worker proposal should use reserve pool funds to create smartcoins and sell them in to the market at feed price plus 10%
- Abandon all smartcoins except BitUSD to drive liquidity to it and then think about adding another smartcoin in a years time.
- Get all gateways to offer the same btcUIA instead of each having their own separate ones. Could be a multisig wallet controlled by committee.
- Get the reserve pool to pay for a bitcoin-BitBTC bridge with guaranteed 2-way liquidity
- Limit trading pairs in the GUI to just USD vs XXX
- Buy an existing exchange like poloniex and migrate its backend over to bitshares.
- Pay some altcoins that are struggling but have big communities to migrate their coins over to bitshares through proof of burn.

Loads of people are going to moan about these ideas but we need to prove a smartcoin works.
The trading volume of USD:BTC over the last 24hrs is actually zero as it is on most days.

I tend to agree with you. focus should be on one bitasset. we can't expect to get all of them running. if you mean with abandon a black swan shutdown of the other smartcoins - that's really radical :D but something has to change...

Offline Akado

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Re: Radical ideas for liquidity
« Reply #11 on: January 28, 2016, 10:20:38 am »
[member=37127]JonnyBitcoin[/member]
A. Dilution will lower the value of BTS - The dilution for this feature would not lower the value of the BTS token, as it does not effect the demand. The supply on "paper" increases, but that supply never makes its way into the market. So, no downward pressure is ever applied onto the market from the BTS printed.

It doesn't need to. What matters is people's perception of what's happening. The simple idea of diluting will put many people off because they will immediately associate it with the merger and consequent price drop.

You could dilute, if people aren't aware of it your plan could work.
On the other hand even if you don't dilute, if people somehow think you're doing it, it will be a "merger" all over again.

People's perception matters a lot imo.
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Offline CoinHoarder

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Re: Radical ideas for liquidity
« Reply #12 on: January 28, 2016, 03:43:24 pm »
[member=37127]JonnyBitcoin[/member]
A. Dilution will lower the value of BTS - The dilution for this feature would not lower the value of the BTS token, as it does not effect the demand. The supply on "paper" increases, but that supply never makes its way into the market. So, no downward pressure is ever applied onto the market from the BTS printed.

It doesn't need to. What matters is people's perception of what's happening. The simple idea of diluting will put many people off because they will immediately associate it with the merger and consequent price drop.

You could dilute, if people aren't aware of it your plan could work.
On the other hand even if you don't dilute, if people somehow think you're doing it, it will be a "merger" all over again.

People's perception matters a lot imo.

I honestly didn't expect you knuckleheads to take my solution seriously. This community is such a joke. You guys argue about trivial things as if they will have some great effect, and ignore the real solutions to problems. My solution solves the problem at hand... better than any other solution that anyone has brought up. You guys will end up wasting more money diluting (real, negative dilution... not the kind I've proposed here) shareholders to put band aids on the problem without ever fixing it. More band aids will be needed to replace the band aids that were ineffective, and so on and so forth.

I don't have time right now to explain fully, but most of Jonny's solutions are unacceptable because they either limit the functionality of Smartcoins/Bitshares, require unreasonable cooperation in between 3rd parties, are unreasonable due to legalities/logistics, or put a band aid on the issue without solving it.
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Offline Akado

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Re: Radical ideas for liquidity
« Reply #13 on: January 28, 2016, 03:49:54 pm »
[member=37127]JonnyBitcoin[/member]
A. Dilution will lower the value of BTS - The dilution for this feature would not lower the value of the BTS token, as it does not effect the demand. The supply on "paper" increases, but that supply never makes its way into the market. So, no downward pressure is ever applied onto the market from the BTS printed.

It doesn't need to. What matters is people's perception of what's happening. The simple idea of diluting will put many people off because they will immediately associate it with the merger and consequent price drop.

You could dilute, if people aren't aware of it your plan could work.
On the other hand even if you don't dilute, if people somehow think you're doing it, it will be a "merger" all over again.

People's perception matters a lot imo.

I honestly didn't expect you knuckleheads to take my solution seriously. This community is such a joke. You guys argue about trivial things as if they will have some great effect, and ignore the real solutions to problems. My solution solves the problem at hand... better than any other solution that anyone has brought up. You guys will end up wasting more money diluting (real, negative dilution... not the kind I've proposed here) shareholders to put band aids on the problem without ever fixing it. More band aids will be needed to replace the band aids that were ineffective, and so on and so forth.

I don't have time right now to explain fully, but most of Jonny's solutions are unacceptable because they either limit the functionality of Smartcoins/Bitshares, require unreasonable cooperation in between 3rd parties, are unreasonable due to legalities/logistics, or put a band aid on the issue without solving it.

Well, you suggested, we discussed it. What's the problem with that?

What you have to consider is not just how to solve one problem, but if the solution to that problem creates other new problems.

It's not that I don't like your idea, I've thought about that too. It sounds good. Thing is I'm divided because I know how most people react to "dilution". If it had no repercussions I would agree with it at 100% but for now I'm divided. I have also thought about using dilution to create assets and bring liquidity in, it makes sense, but I just don't know if it's worth the trouble, because, it's not up to you or me to decide. Most people hate the concept of dilution and even if this would bring in liquidity which I think it has good chances to, it could have other consequences. That's what we need to consider.
« Last Edit: January 28, 2016, 03:52:35 pm by Akado »
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Offline wallace

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Re: Radical ideas for liquidity
« Reply #14 on: January 28, 2016, 04:03:00 pm »
The dex is not a decentralized exchange without a functioning smartcoin. Trading UIAs is nice but can be done faster and cheaper on poloniex.
We are 4 months in to bts 2.0 and none of the smartcoins are liquid. Something big needs to change.
People keep saying we just need a bridge to smartcoins but nobody will provide that bridge without liquidity
Here are some radical ideas of how to increase liquidity.

- The committee or a worker proposal should use reserve pool funds to create smartcoins and sell them in to the market at feed price plus 10%
- Abandon all smartcoins except BitUSD to drive liquidity to it and then think about adding another smartcoin in a years time.
- Get all gateways to offer the same btcUIA instead of each having their own separate ones. Could be a multisig wallet controlled by committee.
- Get the reserve pool to pay for a bitcoin-BitBTC bridge with guaranteed 2-way liquidity
- Limit trading pairs in the GUI to just USD vs XXX
- Buy an existing exchange like poloniex and migrate its backend over to bitshares.
- Pay some altcoins that are struggling but have big communities to migrate their coins over to bitshares through proof of burn.

Loads of people are going to moan about these ideas but we need to prove a smartcoin works.
The trading volume of USD:BTC over the last 24hrs is actually zero as it is on most days.

 +5% +5%

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