bitSHARES - As True Shares and Not a Currency!

[cube]

1. It is not MY new chain... it is OUR new chain...

Why not start a new thread with a poll of how the community wants to move this idea to?

[tonyk]

Hey @tonyk

Have you considered dropping the fungibility of bitAssets for your new chain, and instead go for a metatrader4 compatible platform? That would make it distinct enough from bitshares and would attract a lot of interest from the forex community.

edit: I think you might struggle to raise funding for development otherwise, because to the outside world, your existing proposition looks very similar to bitshares indeed.

Cheers, Paul.

Have you considered dropping the fungibility of bitAssets for your new chain
1. It is not MY new chain... it is OUR new chain...That is the idea at least.

2. I also know that you have given a fair amount of thought to non fungible assets (and so have I but, unfortunately for me to no satisfaction of my own min. requirements ).

...because to the outside world, your existing proposition looks very similar to bitshares indeed.
3. Well, How can I possibly claim otherwise, when the whole point is... getting rid of what is bad in BTS and improving on what is good...when you truly boil it down.

[monsterer]

Hey @tonyk

Have you considered dropping the fungibility of bitAssets for your new chain, and instead go for a metatrader4 compatible platform? That would make it distinct enough from bitshares and would attract a lot of interest from the forex community.

edit: I think you might struggle to raise funding for development otherwise, because to the outside world, your existing proposition looks very similar to bitshares indeed.

Cheers, Paul.

[tonyk]

I'd love to compare two alternative universes in the future - one with the change implemented and one without...

Let's assume there is a developer willing to provide you with the second universe... right now (well within 2-4 mo.) and you can see and compare, the two options in the only universe you live in... the question I guess is - "How much you are willing to pay for that? and in what form?"

"and in what form?" - I guess you can:
- donate to him directly.(How much  will you personally donate?)
- vote for a worker paying him.(How much is the upper limit of such a worker's pay, you will vote for?)
- support a new chain with X% dedicated to the development fund, 100%-X% dropped on bts holders. (What is your X% max?)
-... any other form that suites you better. (Please, explain)

[abit]

Let me preface this by saying if I end up on this new chain with any significant stake (I consider 0.5% significant for this purpose) I will take the opposite approach of BM's. In this case, by putting my money where my mouth is, I mean I will use my stake to short dUSD in existence and slowly release it into the market at current market rate, probably in a period of several months.


So here is the question:
What is you reaction to adding one more obligation to the 'responsible co-op member'. In order to help the co-op's progress and smooth operation every member should help by helping provide some of the native currency. The blockchain enforced min being say 10% of the stake being in collateral. NB no need to actually sell those bitUSD. The believe here is that by having them people will tend to spend them for- transfer/trade fees, membership upgrades??? (I am not even sure we will keep those. Will we?), UIA's etc.

I don't think this enforcement is a good idea. People may have no enough time to take care of the position. We can encourage co-op members to be more responsible by rewards from income even dilution, but it's hard to measure how responsible the member is. The 10% enforce of collateral is useless if the created native currency will never been used, for example if a stake holder is not a day user of the system.

[tonyk]

Let me preface this by saying if I end up on this new chain with any significant stake (I consider 0.5% significant for this purpose) I will take the opposite approach of BM's. In this case, by putting my money where my mouth is, I mean I will use my stake to short dUSD in existence and slowly release it into the market at current market rate, probably in a period of several months.


So here is the question:
What is you reaction to adding one more obligation to the 'responsible co-op member'. In order to help the co-op's progress and smooth operation every member should help by helping provide some of the native currency. The blockchain enforced min being say 10% of the stake being in collateral. NB no need to actually sell those bitUSD. The believe here is that by having them people will tend to spend them for- transfer/trade fees, membership upgrades??? (I am not even sure we will keep those. Will we?), UIA's etc.

[tonyk]

You could count on my support to run a witness node, or even host a webwallet and faucet.  In fact if one of the current bridges is not interested in supporting the new chain, then I would be more than willing to work to develop a bridge between other crypto and this new chain.  I could not touch fiat unfortunately.

I still have concerns, but I think it would be a really great experiment, and if my concerns are unfounded then it would be a superior implementation than the current system.

I think I have found a better way to express my concern as well.  In the current system bitUSD is a derivative that is backed by at least $1.75 worth of BTS.  Since this BTS can currently be sold, anyone wishing to exit bitshares can sell BTS directly.  Thus someone who is long bitUSD, that wants to exit bitshares will sell their bitUSD for BTS and convert their BTS to whatever other currency they wish.  There are two distinct markets. We have a derivative tied to USD and a backing asset that is not tied to USD.

Under this proposal bitUSD would still be a derivative that is backed by at least $1.75 worth of BTS.  However because BTS can not be traded for actual other currencies, in effect the backing asset would be the externally trading asset.  We would end up with a derivative that is backed by itself.  I cannot view such a system as stable.

Actually I translated you concerns to exactly that form after your initial post. Self-chaining I call it. But I do believe you can treat the current system as self-chained as well. BTS is backing the value of bitUSD and the value of BTS is derived from bitUSD being valuable and useful.
To alleviate your concerns to some extend regarding dShares - They are not totally untradeable. they are shares that are supposed to be offered to the members of the co-op first (so in the own DEX). Additionally one can sell(transfer) his whole account to anyone.

[puppies]

You could count on my support to run a witness node, or even host a webwallet and faucet.  In fact if one of the current bridges is not interested in supporting the new chain, then I would be more than willing to work to develop a bridge between other crypto and this new chain.  I could not touch fiat unfortunately.

I still have concerns, but I think it would be a really great experiment, and if my concerns are unfounded then it would be a superior implementation than the current system.

I think I have found a better way to express my concern as well.  In the current system bitUSD is a derivative that is backed by at least $1.75 worth of BTS.  Since this BTS can currently be sold, anyone wishing to exit bitshares can sell BTS directly.  Thus someone who is long bitUSD, that wants to exit bitshares will sell their bitUSD for BTS and convert their BTS to whatever other currency they wish.  There are two distinct markets. We have a derivative tied to USD and a backing asset that is not tied to USD.

Under this proposal bitUSD would still be a derivative that is backed by at least $1.75 worth of BTS.  However because BTS can not be traded for actual other currencies, in effect the backing asset would be the externally trading asset.  We would end up with a derivative that is backed by itself.  I cannot view such a system as stable.

[Pheonike]

Why not do the opposite and have bitasset:bts pairs traded only on external exchanges? The DEX then becomes a store where bitassets are brought/sold directly by the network. Users can't buy/sell bitassets for bts between each other. People can still short their own bitassets into existence and even get a reward from the network based on how much more collateral they use.  We sell the bitassets at a percentages above price feed. The more BTS a exchange/person keeps in the DEX the better exchange rate they get. It would be like using the 0% fee transfer protocol for pricing the exchange rate. The more stake you have, the better rate you get for buying bitassets.

[monsterer]

Isn't this the main reason why no bridge - you or anybody else even thinks about providing BTC->bitBTC bridge? The proposal effectively locks as much BTS as if you sold BTS for the BTC received at the current price and nothing more. Isn't this a good deal. This is effectively equal to what happen if it was a bridge for  BTS<->BTC.

To be honest, the main reason was a complete lack of demand. We had a bitBTC/BTC pair, but no one used it, so we dropped it. Your proposal does ease the creation of bitBTC compared to the existing design.

[abit]

What I am trying to solve with the collateral sponsors proposal is - the need for the bridges to come up with 2x in BTS for collateral when a customer wants to go from BTC into bitBTC. Isn't this the main reason why no bridge - you or anybody else even thinks about providing BTC->bitBTC bridge? The proposal effectively locks as much BTS as if you sold BTS for the BTC received at the current price and nothing more. Isn't this a good deal. This is effectively equal to what happen if it was a bridge for  BTS<->BTC.

Just comes one idea. If we can provide CFD style 100% collateral backed asset, why we need 200%? In any case except a black swan event, the rest 100% is not changed thus unnecessary. With 100% collateral you can afford 50% price drop, with 200% collateral you can afford 75% price drop, both are not 100% safe.

[tonyk]

No responses whatsoever?

Tony, I replied earlier. Did you see it?

No, I saw it but it was about the black swan. Black swan are a problem for bitAssets in general and as we deal with such assets they do apply but are not specifically caused by what I suggested.  I was asking for comments about problems caused by proposal or in connection with its design.

Important points:
In case of liquidation the collateral provided by the bridge is used to cover the losses (if any) first [before the collateral from the 'collateral sponsor'] .
The loss for the bridge is fictional BTW. That loss is exactly offset by the same gain of holding BTC received by the customer requesting the bridge from BTC to bitBTC.

I don't think the loss is fictional - If a customer sells us 1 bitBTC, and then the price of BTS drops, we start to incur liquidation risk as the value of the collateral drops, whereas the customer does not, since we sent him 1 genuine BTC.

Wait a minute. I am not trying to solve all bridges issues real or perceived. For example I cannot help if a bridge is reluctant to hold  BTS or BTC. In your example above it is easy - you close your short with the bitBTC received and you end up with pure BTS. If this somehow is a problem for the bridge I cannot help.

What I am trying to solve with the collateral sponsors proposal is - the need for the bridges to come up with 2x in BTS for collateral when a customer wants to go from BTC into bitBTC. Isn't this the main reason why no bridge - you or anybody else even thinks about providing BTC->bitBTC bridge? The proposal effectively locks as much BTS as if you sold BTS for the BTC received at the current price and nothing more. Isn't this a good deal. This is effectively equal to what happen if it was a bridge for  BTS<->BTC.

[monsterer]

Sure.  Users send their BTC to Poloniex, for example, and purchase POLO.BTS.  They can trade in and out of it.  Why do they need to transfer BTS?  They just want to trade.

And how does Poloniex fund an infinite supply of BTS; or at least enough to convert any amount of BTC which might get transferred? The reverse question also applies with withdrawals.

Basically, what this implies is that polonix becomes a bridge for BTS, and this is outside their business model.

[hadrian]

The answer also depends on what you consider the main benefits of the new approach. If you find that what it does for the bitAssets is the main benefit, why first wait on inferior version of bitAsset to take off before implementing the superior?

I think the point is that it's too risky at the moment to make such a change to Bitshares.  And a new chain would be DOA (that means dead on arrival, tony).  So right now we should concentrate on getting BitAssets moving in the right direction, taking liquidity measures that can be taken now, giving the entire system a chance to become more robust with a lively internal market for BTS, and a much more active DEX in general.  Then we'll be in a better position to create your perfect peg and take BitAssets to the next level.  You have to learn to crawl before you can learn to walk!

What you say does makes sense, but I'm still not sure I agree. I'm wrestling to settle on a balanced viewpoint for this...

Looking at it from another angle you could say, "Why learn to crawl if you want to fly?".

Part of me sees it this way:

• BitShares is still in it's infancy, learning the ways of the world. We can try new things, learn from experience and react by making changes in order to optimize the system for long term success. It is much easier to make changes to a foundation before it is built on. Once maturity is reached, changing the foundation can become infeasible. Compared with what it aims to become, BitShares is still tiny and new. Perhaps now is the only time we could get away with making a change like this.

I'd love to compare two alternative universes in the future - one with the change implemented and one without...

The other thing I'm trying to get my head around is whether or not we would be "allowed" to make the change. That is to say, does it break the agreement of what people have 'signed up for'?

[tbone]

What does transferability of BTS have to do with whether an external exchange can allow its users to trade BTS on their exchange?  All the exchange has to do is purchase BTS in their own wallet and issue EXCHANGE.BTS tokens to their users to trade on their own platform, exactly as they do now.  What am I missing?

So, users arrive on this exchange - how do they deposit their BTS? How do they withdraw it? Walk me through the process.

Sure.  Users send their BTC to Poloniex, for example, and purchase POLO.BTS.  They can trade in and out of it.  Why do they need to transfer BTS?  They just want to trade.