Author Topic: ETF-like BitAsset that's pegged to the price of the top 10 coins?  (Read 16433 times)

0 Members and 1 Guest are viewing this topic.

Offline karnal

  • Hero Member
  • *****
  • Posts: 1068
    • View Profile
I'm really excited about this one. I pledge to buy 500€ worth of the stuff every month, in BTC or EUR or CNY.

Lets make it happen!

Offline EstefanTT

I'd like to see speculation on:

AltCrypto10 (#2 - #11)
Crypto10 (#1 - #10)

I think you will have 2 different markets that have different opinions about adding in Bitcoin.
The way the index is done limit the % (the weight) of the biggest MC. BTC doesn't weight more than 10% in the Bit20 ( index of the 20 top crypto.)
Also, the index doesn't include ripple, we felt we can't consider it like an crypto-currency because of the centralisation.

I think the distinction BTC / Altcoins is going to disapear slowly. We'll soon call all of them "cryptocurrencies". Last week, ETH was value at 1/6th of BTC MC, it didn't feel like an Altcoin to me. Neither will BTS when it will be 4x the MC of BTC ... ;p
Bit20, the cryptocurrency index fund http://www.bittwenty.com
(BitShares French ConneXion - www.bitsharesfcx.com)

TravelsAsia

  • Guest
I'd like to see speculation on:

AltCrypto10 (#2 - #11)
Crypto10 (#1 - #10)

I think you will have 2 different markets that have different opinions about adding in Bitcoin.

Offline EstefanTT

now let's assume we had a liquid USD .. then you could create that index with USD as collateral .. and really let people speculate on that one number on CMC :)

Shoot me a PM if you want to make this real and need concrete technical assistance!
Thanks ! I will !

I have to talk first with the friend who made this with me and see what he thinks about that but he will probably be thrill be the idea.

We will probably have to review our math and ponderations to be sure it's perfect before going any further.
Bit20, the cryptocurrency index fund http://www.bittwenty.com
(BitShares French ConneXion - www.bitsharesfcx.com)


Offline hcf27

  • Full Member
  • ***
  • Posts: 116
    • View Profile
  • BitShares: hcf27
now let's assume we had a liquid USD .. then you could create that index with USD as collateral .. and really let people speculate on that one number on CMC :)

Shoot me a PM if you want to make this real and need concrete technical assistance!

Come on! lets make this happen boys! it can sky rocket BTS for sure.. I will contribute with some marketing once the asset is out

Offline tonyk

  • Hero Member
  • *****
  • Posts: 3308
    • View Profile

In that case, why would someone spend the time and efforts to create a smartcoin if there is no economical incventives ? Pure altruisme is not the strong suit of human beeing ...

Did I understand it well ?

You can for sure set and collect a trading fee of any smart coin you create. So there is an incentive. Take a look at this private smart coin - TCNY http://cryptofresh.com/a/TCNY. There is a field "Market fee" it is 0% in this case, but you can set it to anything say 0.2% and collect 0.2% on each trade for you smart coin.
Some money can be made by setting the core exchange rate for the coin, too
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline xeroc

  • Board Moderator
  • Hero Member
  • *****
  • Posts: 12922
  • ChainSquad GmbH
    • View Profile
    • ChainSquad GmbH
  • BitShares: xeroc
  • GitHub: xeroc
now let's assume we had a liquid USD .. then you could create that index with USD as collateral .. and really let people speculate on that one number on CMC :)

Shoot me a PM if you want to make this real and need concrete technical assistance!

Offline karnal

  • Hero Member
  • *****
  • Posts: 1068
    • View Profile
Add "Xerocs' guide to making a million with CRYPTOTEN" to the list of things we need!

Seriously though. I think this could be huge..

Offline xeroc

  • Board Moderator
  • Hero Member
  • *****
  • Posts: 12922
  • ChainSquad GmbH
    • View Profile
    • ChainSquad GmbH
  • BitShares: xeroc
  • GitHub: xeroc
When you create a smartcoin you can choose the collateral asset .. and by this you also choose a base market .. e.g. USD:BTS (BTS is collateral)
Any price in markets are actually relations between 2 assets. Gold price is denoted in USD or EUR (two assets). BTS price is denoted in BTC (two prices).

Now people shorting speculate on the USD/BTS price to go down .. e.g. BTS to worth more USD. .. or USD being worth less BTS. Then they buy back and make a profit.

This you can do with an index as well .. if the TOP10 index has BTS as collateral, then you speculate the BTS price against the price of all top10 coins .. e.g. the BTS asset to climb in the list of top10 assets.
If the smartcoin had bitUSD as collateral .. then you would speculate on the USD nomination of the top10 index to go up or down (pretty much like the number at the very top of coinmarketcap.com)

So there will CERTAINLY be people shorting it ... if they only knew about it!

Offline karnal

  • Hero Member
  • *****
  • Posts: 1068
    • View Profile
I say lets add this to the price feed scripts, then advertise it on /r/cryptocurrency and some major news sites (some of our people are well connected for this and know who to reach for).

This ETF is one way only: MOON :o

... however.

It makes most sense for the most active markets on this one to be :USD, :EUR, :CNY and probably :BTC, so it seems the liquidity problem would have to be eliminated for this to really make sense!

Offline EstefanTT

In that case, why would someone spend the time and efforts to create a smartcoin if there is no economical incventives ? Pure altruisme is not the strong suit of human beeing ...

Did I understand it well ?

I've been around for some time and still don't really quite understand the mechanics of this and what's at stake.

Am I risking losing money if I borrow some BitCHF for instance?

Or if the closest sell for BitUSD is too far from settlement price, could I make a profit by borrowing some USD and selling it at a fair price?

It just seems a bit like wizardry, the rules are not so clear (or I failed to grasp them) .. maybe the incentives are not set up right.. I don't know.

It would be nice if someone has a nice article/blog post explaining this in a way that a trading noobie could grasp.



Other than that.. this really seems like a good idea, I'd buy 500€ worth of the stuff every month!
Lots of persons would put some money in it, even invest part of their bank account fiat money. The index can't hardly go down on the long run. It would be like a hell of a good investment oportunity.

If anyone can answer the questions in this thread, (s)he is very welcomebto participate.
Bit20, the cryptocurrency index fund http://www.bittwenty.com
(BitShares French ConneXion - www.bitsharesfcx.com)

Offline karnal

  • Hero Member
  • *****
  • Posts: 1068
    • View Profile
In that case, why would someone spend the time and efforts to create a smartcoin if there is no economical incventives ? Pure altruisme is not the strong suit of human beeing ...

Did I understand it well ?

I've been around for some time and still don't really quite understand the mechanics of this and what's at stake.

Am I risking losing money if I borrow some BitCHF for instance?

Or if the closest sell for BitUSD is too far from settlement price, could I make a profit by borrowing some USD and selling it at a fair price?

It just seems a bit like wizardry, the rules are not so clear (or I failed to grasp them) .. maybe the incentives are not set up right.. I don't know.

It would be nice if someone has a nice article/blog post explaining this in a way that a trading noobie could grasp.



Other than that.. this really seems like a good idea, I'd buy 500€ worth of the stuff every month!

Offline Shentist

  • Board Moderator
  • Hero Member
  • *****
  • Posts: 1601
    • View Profile
    • metaexchange
  • BitShares: shentist
METAFEES are in effect a basket of 4 cryptos BTC BTS ETH NXT
METAFEES trade in the free market but are not redeemable for the basket of coins. This could be considered the first bitETF.

They have a (NAV) net asset value which was quoted by @Shentist at the last buyback.

that's true! I personal see METAFEES as a kind of index with added feature of earning some money via transfering value between the supported coins. the
risk of the UIA is the same as ever : we can run with the money or could get hacked or we have a major failure in our pricing.

i like the idea or a ETF as a smartcoin, and who would short it? the same people who are shorting bitBTC. all the believers they think BTS will outperforme
the basket.

Offline EstefanTT

Personally I'd say going the Smartcoin way is the best option here. It's better if we dont' have to trust a 3rd party, especially over years .. otherwise it's no better than a brokerage account (well, less fees, but that's it) .. if the broker goes bust, that's it.

In fact, it's worse in this case, because the broker (UIA creator) would be small fish.

We need to take advantage of the Smartcoins.. getting rid of centralization and having to trust a third party was/is one of the big things which Bitshares could/can use to distinguish itself... IMO.

That's also what I think !

An UIA will never be a popular index because of the risk associated with one person in control of the funds.

In the case of a smartcoin, the index becomes decentralised, the witness provides the price feed based on a script and the token only can exist with shorters. It belongs to the Blockchain and nobody can profit from it except BitShares itself from the transactions and trades made with the smartcoin.

In that case, why would someone spend the time and efforts to create a smartcoin if there is no economical incventives ? Pure altruisme is not the strong suit of human beeing ...

Did I understand it well ?
Bit20, the cryptocurrency index fund http://www.bittwenty.com
(BitShares French ConneXion - www.bitsharesfcx.com)