how about to optimize the parameters of bitCNY like this?

[xeroc]

Guys, soon we'll have a new smart coin ARS, why not test the new parameter with it first? Nobody would get hurt with a new asset.

Good idea ...
Paging @elmato

[abit]

Guys, soon we'll have a new smart coin ARS, why not test the new parameter with it first? Nobody would get hurt with a new asset.

[pc]

@pc
suppose Alice buy some BTS at 0.04CNY and short them to get 1000 bitCNY to buy some assets, the margin call price of the debt position is 0.02CNY, if the BTS price fall to 0.03CNY and Alice's debt position is force settled, is she hurt?

She is hurt by the price fall, obviously.
She isn't hurt by the settlement - after the settlement her position has the same overall value as before the settlement.

But I am willing to support such an experiment in bitCNY unless someone
can come up with a solid argumentation to NOT try it.

The solid argument is that modifying the settlement guarantee is hurting bitCNY holders by effectively robbing them of 1% of their assets.
Committee members voting for such a proposal may even be legally liable for the resulting financial damage.
Robbing holders of bitAssets will destroy all credibility of bitAssets, nobody's going to touch them again with a long pole. Committee members voting for such a proposal will be responsible for this, too.

[xeroc]

@pc
suppose Alice buy some BTS at 0.04CNY and short them to get 1000 bitCNY to buy some assets, the margin call price of the debt position is 0.02CNY, if the BTS price fall to 0.03CNY and Alice's debt position is force settled, is she hurt?

Well, that's HER, who took the risk and she should know about that risk
prior to borrowing anything from the network. Being "hurt" doesn't
really fit here, she gambled, and lost at her very own fault.

holder has the choice of whether to issue force settlement, but shorter has no option to refuse being force settled.

Setting a 1% offset won't change anything here. Shorters always have
just two options:
* adjust collateral
* get margin called

What changes is the premium (maybe) and the liquidity (also maybe).

But I am willing to support such an experiment in bitCNY unless someone
can come up with a solid argumentation to NOT try it. For me, a
settlement offset is still just a percentage fee that is taken by the
network (and thus profits all shareholders at the cost of long-positions
that can get out before this gets implemented on chain) and might bring
in some liquidity.

[bitcrab]

in China now transwiser is the only gateway that handle the deposit/withdraw of bitCNY and TCNY. btareserve is the main userid of transwiser, you can check the current data of bitCNY and TCNY at http://cryptofresh.com/a/CNY and http://cryptofresh.com/a/TCNY , one obvious fact is that for bitCNY, transwiser always need to short to supply bitCNY to users and now has a big debt, because users always prefer to buy bitCNY from transwiser than short by himself, as they are afraid to be force settled. for TCNY, transwiser now have net balance without any debt, as users would like to short by themselves.

sometimes as gateway, transwiser has to issue force settlement of TCNY with paying 1% offset for liquidity, anyway this is better than the status that transwiser always has to short. if bitCNY be set 1% offset, I believe shorters will provide more bitCNY however holders do not always need to issue force settlement, as bitCNY is more wildly used and can be used in several trade pairs.

the voice from the main market area should be a main reference on whether and how to modify a smartcoin's parameters, now in China community most of the members support this change.

Well, I interpret that as the voice of transwiser who is taking the risk
of shorting bitcny into existence. But it has been your decision to do
so and should be part of your risk considerations.

Having said that, I still see merits in "asking for a 1% fee" (i.e.
settlement offset of 1%) or even a variable percentage in order to get
the non-settlement trades closer to the peg and reduce the premium.

However, I recognize the issues @pc is having with "changing the rules
mid-game" but the rules will only change if the shareholders agree (i.e.
do not disagree) and thus such proposal should have a long expiration.
30 days may even be to short.

I don't think we should rush this topic but instead prepare properly. I
would like to see some statistics about the actual premium for bitassets
(against settlement price) over time. Maybe @abit can help with this
using he new plugin.

@xeroc afaik, MAKER use variable settlement offset in the design, the higher the collateral ratio, the higher the settlement offset, this is reasonable, and this means it is not fee charged by network, but a compensation from settler to shorter. surely BTS can also consider similar variable settlement offset, but I still strongly propose to do a simple parameter change first for bitCNY, as to implement a variable settlement offset may cost much long time.

I don't have a direct contact to chinese investors/CNY holders, but we
might want to use bitCNY to test a settlement offset before even
considering other smartcoins. That way, a change only affects CNY
holders and not USD, GOLD holders but I don't know how to best approach
this

this topic is not only relevant to transwiser, it is relevant to the whole ecosystem, I take transwiser and bitCNY/TCNY as example to show that 0 offset really discourage shorters, if shorters are always discouraged, with low supply level smatcoin cannot play the role of a senseful trading medium.

yes, we should  first apply the change to bitCNY and observe what's the different behavior between bitCNY and other smartcoins, especially bitUSD, this can also help us to understand "what will 1% offset bring"  more deeply.

however, I think 30 days expiration is long enough, we need to balance stability and efficiency.

@pc
suppose Alice buy some BTS at 0.04CNY and short them to get 1000 bitCNY to buy some assets, the margin call price of the debt position is 0.02CNY, if the BTS price fall to 0.03CNY and Alice's debt position is force settled, is she hurt?

the normal business logic is: she borrow 1000 bitCNY with enough collateral, then the collateral should not be force settled except that the collateral price fall below the margin call price.

you may say that she can buy BTS at 0.03CNY and hedge this risk, but she need to pay time and effort to follow what happen, and even when she try to do this, she may not able to find the chance to buy BTS at 0.03CNY as the price always change quickly, anyway she need to pay more cost of time/effort/chance to avoid loss. this is why she is hurt.

holder has the choice of whether to issue force settlement, but shorter has no option to refuse being force settled.

[pc]

We've had that discussion before. Settlement doesn't hurt anybody because it happens at face value. Compensation is not necessary.

I haven't saw your discussion, but the 0 offset setting really hurt the shorter, maybe only a robber will think he definitely have the power to force a shorter to sell the collateral just at the settlement price.

Please explain how the shorter is hurt when 1 CNY is exchanged for the equivalent worth of BTS.

Also, if bitassets are currently trading at a premium then shorters have an opportunity to sell above the settlement price, in which case they actually make money from forced settlement.

[xeroc]

in China now transwiser is the only gateway that handle the deposit/withdraw of bitCNY and TCNY. btareserve is the main userid of transwiser, you can check the current data of bitCNY and TCNY at http://cryptofresh.com/a/CNY and http://cryptofresh.com/a/TCNY , one obvious fact is that for bitCNY, transwiser always need to short to supply bitCNY to users and now has a big debt, because users always prefer to buy bitCNY from transwiser than short by himself, as they are afraid to be force settled. for TCNY, transwiser now have net balance without any debt, as users would like to short by themselves.

sometimes as gateway, transwiser has to issue force settlement of TCNY with paying 1% offset for liquidity, anyway this is better than the status that transwiser always has to short. if bitCNY be set 1% offset, I believe shorters will provide more bitCNY however holders do not always need to issue force settlement, as bitCNY is more wildly used and can be used in several trade pairs.

the voice from the main market area should be a main reference on whether and how to modify a smartcoin's parameters, now in China community most of the members support this change.

Well, I interpret that as the voice of transwiser who is taking the risk
of shorting bitcny into existence. But it has been your decision to do
so and should be part of your risk considerations.

Having said that, I still see merits in "asking for a 1% fee" (i.e.
settlement offset of 1%) or even a variable percentage in order to get
the non-settlement trades closer to the peg and reduce the premium.

However, I recognize the issues @pc is having with "changing the rules
mid-game" but the rules will only change if the shareholders agree (i.e.
do not disagree) and thus such proposal should have a long expiration.
30 days may even be to short.

I don't think we should rush this topic but instead prepare properly. I
would like to see some statistics about the actual premium for bitassets
(against settlement price) over time. Maybe @abit can help with this
using he new plugin.

@xeroc afaik, MAKER use variable settlement offset in the design, the higher the collateral ratio, the higher the settlement offset, this is reasonable, and this means it is not fee charged by network, but a compensation from settler to shorter. surely BTS can also consider similar variable settlement offset, but I still strongly propose to do a simple parameter change first for bitCNY, as to implement a variable settlement offset may cost much long time.

I don't have a direct contact to chinese investors/CNY holders, but we
might want to use bitCNY to test a settlement offset before even
considering other smartcoins. That way, a change only affects CNY
holders and not USD, GOLD holders but I don't know how to best approach
this

[bitcrab]

in 0 offset setting, the holder is ok but the shorter is always hurt. why should the holder have power to force the shorter to sell BTS to him without any compensation? the 0 offset setting discourage shorting, means it discourage bitasset supply.

We've had that discussion before. Settlement doesn't hurt anybody because it happens at face value. Compensation is not necessary.

Changing the rules in the proposed way *does* hurt holders, by devaluating their holdings by 1% in favour of shorters.

You haven't answered my question about your motivation for this proposal.

I have told the motivation clearly  -  to encourage more bitasset supply to fulfill trade demands.
I haven't saw your discussion, but the 0 offset setting really hurt the shorter, maybe only a robber will think he definitely have the power to force a shorter to sell the collateral just at the settlement price.

this is not changing rules in mid-game, the design of BTS2.0 set the committee mechanism for parameter change, now and then there are necessity to review some parameters and make necessary change,  a reasonable change with good notice work will benefit the whole economy.

This change is not "necessary". If you think it is, prove it. All I've seen here are assumptions and wild speculations.
You haven't answered my question about TCNY/TUSD either, despite the fact that you're the issuer and should know the answer.

the 0 offset hurt the shorters and discourage the bitassets supply - that is why it need to be changed, I cannot convince you if you do not want to understand.

TUSD is just defined but not actually put into use, so now let me compare the behavior of bitCNY and TCNY.

in China now transwiser is the only gateway that handle the deposit/withdraw of bitCNY and TCNY. btareserve is the main userid of transwiser, you can check the current data of bitCNY and TCNY at http://cryptofresh.com/a/CNY and http://cryptofresh.com/a/TCNY , one obvious fact is that for bitCNY, transwiser always need to short to supply bitCNY to users and now has a big debt, because users always prefer to buy bitCNY from transwiser than short by himself, as they are afraid to be force settled. for TCNY, transwiser now have net balance without any debt, as users would like to short by themselves.

sometimes as gateway, transwiser has to issue force settlement of TCNY with paying 1% offset for liquidity, anyway this is better than the status that transwiser always has to short. if bitCNY be set 1% offset, I believe shorters will provide more bitCNY however holders do not always need to issue force settlement, as bitCNY is more wildly used and can be used in several trade pairs.

the voice from the main market area should be a main reference on whether and how to modify a smartcoin's parameters, now in China community most of the members support this change.

@xeroc afaik, MAKER use variable settlement offset in the design, the higher the collateral ratio, the higher the settlement offset, this is reasonable, and this means it is not fee charged by network, but a compensation from settler to shorter. surely BTS can also consider similar variable settlement offset, but I still strongly propose to do a simple parameter change first for bitCNY, as to implement a variable settlement offset may cost much long time.



 

[chono]

You cannot make sure that every holder of bitassets will notice.

The settlement function is the "guarantee" that holders can exchange their bitassets for the equivalent worth of BTS. Bitasset holders have bought under the assumption that this guarantee will hold. Now you want to reduce that guarantee from "equivalent worth" to "99% of its value", which will automatically devalue the affected bitassets and effectively rob bitasset owners of 1% of their holdings.

IMO we're going to lose all credibility if we start changing the rules in mid-game.

in 0 offset setting, the holder is ok but the shorter is always hurt. why should the holder have power to force the shorter to sell BTS to him without any compensation? the 0 offset setting discourage shorting, means it discourage bitasset supply.

this is not changing rules in mid-game, the design of BTS2.0 set the committee mechanism for parameter change, now and then there are necessity to review some parameters and make necessary change,  a reasonable change with good notice work will benefit the whole economy.

in China community - the main area that use bitCNY - bitCNY is accepted well, but always the supply is not enough, considering there will be more assets be traded in DEX, the supply of bitCNY is far from enough, this change mainly intent to encourage shorting.

I'll check and draft a BSIP.

Sent from my Nexus 6 using Tapatalk

[xeroc]

Vaild points @pc ..

I personally still not only see a correlaction but causality between settlement offset being 0% and a premium on bitassets. That has also been discussed in the whitepaper (which was written by me though)

Anyway I am happy we have this discussion again.

In the meantime, why not even discuss a variable settlement offset? (Btw, i still see it as a percentage fee asked for by the network for providing the service of settlements)

[pc]

in 0 offset setting, the holder is ok but the shorter is always hurt. why should the holder have power to force the shorter to sell BTS to him without any compensation? the 0 offset setting discourage shorting, means it discourage bitasset supply.

We've had that discussion before. Settlement doesn't hurt anybody because it happens at face value. Compensation is not necessary.

Changing the rules in the proposed way *does* hurt holders, by devaluating their holdings by 1% in favour of shorters.

You haven't answered my question about your motivation for this proposal.

this is not changing rules in mid-game, the design of BTS2.0 set the committee mechanism for parameter change, now and then there are necessity to review some parameters and make necessary change,  a reasonable change with good notice work will benefit the whole economy.

This change is not "necessary". If you think it is, prove it. All I've seen here are assumptions and wild speculations.

You haven't answered my question about TCNY/TUSD either, despite the fact that you're the issuer and should know the answer.

[bitcrab]

You cannot make sure that every holder of bitassets will notice.

The settlement function is the "guarantee" that holders can exchange their bitassets for the equivalent worth of BTS. Bitasset holders have bought under the assumption that this guarantee will hold. Now you want to reduce that guarantee from "equivalent worth" to "99% of its value", which will automatically devalue the affected bitassets and effectively rob bitasset owners of 1% of their holdings.

IMO we're going to lose all credibility if we start changing the rules in mid-game.

in 0 offset setting, the holder is ok but the shorter is always hurt. why should the holder have power to force the shorter to sell BTS to him without any compensation? the 0 offset setting discourage shorting, means it discourage bitasset supply.

this is not changing rules in mid-game, the design of BTS2.0 set the committee mechanism for parameter change, now and then there are necessity to review some parameters and make necessary change,  a reasonable change with good notice work will benefit the whole economy.

in China community - the main area that use bitCNY - bitCNY is accepted well, but always the supply is not enough, considering there will be more assets be traded in DEX, the supply of bitCNY is far from enough, this change mainly intent to encourage shorting.

I'll check and draft a BSIP.
 

[pc]

You can see it thos way: The peg is not effected directly and you can still settle at parity but need to pay a 1% fee for your settlement ..

No, you can't see it this way. Fees are an entirely different thing in BitShares. Relative fees for forced settlement don't exist. So whatever you call it, you're changing the rules in mid-game.

But as you can clearly see, a settlement price if 100% results in a premium.

...and of course the idea that one is the result of the other is pure speculation, too.

How about getting more data before suggesting changes. AFAIK some attempts have been made with bitassets with different parameters (TCNY/TUSD?). Do these perform better? If so, in which way are they "better" and why?

[xeroc]

You can see it thos way: The peg is not effected directly and you can still settle at parity but need to pay a 1% fee for your settlement ..

Merchants wont care much about it because most of them dont want to settle into BTS.

I agree that a poll doesnt give the idea any credibility. Thats why a proposal should have a 30 day expiration so that shareholders can vote out approving committee members if they dont agree.

In the end the idea is to reduce the premium of bitassets about EVERYONE is complaining. This will probably IMPROVE the peg long term and thus also the liquidity at narrower spreads, but that is of course just my prediction

@mindphlux: there is no research because we have never tried. But as you can clearly see, a settlement price if 100% results in a premium.

Also, as you can see from the history, there havent been so many settlements from bitassets.

[mindphlux]

Changing the rules seems like a bad idea. Ever since the beginning, it's been said that there is a price floor for bitAssets that a user/merchant can count on.

Having said that, I think there is insufficient proof of demand - a poll of 12 results hardly counts as a empiric proof that there is really demand. I'm also missing proper research, how would Bitshares benefit if it was implemented or how is Bitshares suffering at the moment when that change is not implemented right now? A economic change like this needs proper due dilligence.