BitUSD needs liquidity for those that want to buy it.

[JonnyB]

Time to close this thread.
After too many posts it becomes hard to track what's been said and confusion ensues.

The conclusion I have reached from reading all these posts is that while most agree BitUSD needs liquidity, the method of creating BitUSD by committee for sell side liquidity is not supported by a large majority.

However. Another suggestion brought up by xeroc where worker proposals are paid in BitAssets instead of BTS got support from alot of people.

The details of how this might work need to discussed so I am going to start a new thread proposing this idea in more detail.
Thanks for all the feedback.

[tbone]

https://prestonbyrne.com/2014/08/17/dont-walk-away-run/

There you go. A detailed analysis on how dumb, 'smartcoins' are.

The facts in that article are just wrong .. they may have been right in BTS-X .. but they are no longer .. 2014 is so 1900

Sounds like a good opportunity to refute all of the points in that article and put it on steemit!

I would be very interested to read

That bitMormot thing still comes up often enough after I mention Bitshares to people and they go do some research ..

If you want to extol the virtues of Bitshares in general and BitAssets in particular, that's great.  But I don't think it will be helpful in any way, shape, or form to dignify that article by linking to it and/or quoting it.  Please just let it continue fading into the dustbin of history.

[karnal]

https://prestonbyrne.com/2014/08/17/dont-walk-away-run/

There you go. A detailed analysis on how dumb, 'smartcoins' are.

The facts in that article are just wrong .. they may have been right in BTS-X .. but they are no longer .. 2014 is so 1900

Sounds like a good opportunity to refute all of the points in that article and put it on steemit!

I would be very interested to read

That bitMormot thing still comes up often enough after I mention Bitshares to people and they go do some research ..

[xeroc]

https://prestonbyrne.com/2014/08/17/dont-walk-away-run/

There you go. A detailed analysis on how dumb, 'smartcoins' are.

The facts in that article are just wrong .. they may have been right in BTS-X .. but they are no longer .. 2014 is so 1900

[tarantulaz]

https://prestonbyrne.com/2014/08/17/dont-walk-away-run/

There you go. A detailed analysis on how dumb, 'smartcoins' are.

[Chris4210]

Why would someone buy BTS and convert them into BitUSD, when the only thing he does is to raise the value of BTS and then risk losing all his money in an extreme scenario where the price goes down?

I think we have to consider the different users of a BitUSD.

First, we have the traders, bankers, and industry experts. The concept of derivative contracts is 101 for every trader. How to read the market, how to short etc. They are the ones who will be in charge of buying BTS and shorting BitAssets. They can handle the risk and hedge themselves against losses.

Second, we have regular users of BitAssets who do not understand the technical details how they work. And quit honestly they don´t care. They want to keep the digital currency linked to Fiat for consumption and savings.

The most important goal to prevent a big devaluation of BTS is to give users a reason to use it. If we have thousands of users who just use BitUSD for payments, then it is very unlikely that BTS lose their value in a very short time.
A community has to give a coin value. It is the same with Bitcoin and fiat currencies like Euro and Dollar. We as a society commonly agree that I can buy product and services in the value of 1 Euro at any time. If this common trust in the currency is broken, we have to come up with a new trade good.

Another solution would fit nicely would be that all worker proposals are paid in BitUSD but this would require a hard fork.

That's not true. I proposed on several occasions to create a new multisig account (owned by the committee) that actually creates the workers for people looking to work for BitShares, gets the BTS and borrows bitUSD at ratio 3x or more) to pay them to the "employee" ...
All we need to do is to agree on this process since the shareholder needs to pay 3x - MORE for the worker in BTS terms to fund the collateral.

I'm glad you agree this would be a suitable alternative. We should look to develop this idea further.
When I said it would require a hard fork I meant for it to be done in a decentralised way. 
Yes the committee-account could pay BitUSD to workers that mirrors the pay that they receive for their own worker proposals. (but this isn't very elegant)
The ultimate solution would be if all workers were paid in Bitusd that was created autonomously using the funds in the reserve pool as backing. (this would need a hard fork)

I would like to pick up the discussion here. How would such a BitAsset worker look like? How long would it take to write the code and who can control the worker? Would the BitAsset worker be a new worker type?

It would be interesting if I could choose between a BTS or BitAsset worker. We should consider the option and give it a try. I am for a BitAsset worker!

[dxdxdx5889702]

1%compensation is not theft, it encourages the transaction bitusd-bts, do not encourage people to mortgage production bitusd damage.

[tonyk]

I have to point out that i used to be a big fan of BitAssets. I thought they were amazing and it took my a while to understand how they work, precisely because it didn't make any financial sense. I would also like to apologise to @tonyk who I personally attacked and thought he was an idiot.

But... but he is indeed an idiot!

I couldn't understand why was he spending his time trying to reason with people that didn't have a clue about the things they were talking about (myself included) and I finally understand why bitcoin maximalists call altcoins scams...

anyway this is  a child's play, in comparison
...wait until the steaming pile of steem_ed BS  inevitably implodes... then you will see what a srypto scheme colapse does to the unsuspected masses...

It will an epic fun...unfortunately ONLY for the 2 of us not evolved - me and E1.08

[tarantulaz]

You are mixing completely different concepts together. Bitshares is not a bank. Neither of crypto is. All investments are risky. Some of them are more risky and some are less risky. Collateral in bitshares is adjustable, it is the community who chose it to be as high as it is. You don't like BTS collateral? Then go ahead  and create assets which are fully backed by physical gold and silver. Good luck with that.

It isn't a different concept and I don't understand why do you get so confused. You take an extremely risky asset and you try to make it stable, which is abnormal. Never heard of : With Bitcoin you are your own bank? With BitShares it has gone as far as : You are your own bank and you can issue your own USD. You are the FED. Is it so bloody hard to understand that if we start printing our own USD, we are essentially like the FED? The fact that it is done in a decentralized fashion, by non-professionals, doesn't mean that it is going to be good. Somehow with crypto everyone things that he is a professional and he knows how do shit.

Chill out dude. You are not FED. Nobody here is. Never heard of secured loans? They are known to humankind for ages. BitAsset is nothing more than secured loan. Anything of value can be used as collateral, including crypto tokens. What problem do you have with this?

Why did you bring gold and silver up? I am talking about FIAT.

Make an account at openledger.info, search for bitGold and bitSilver. Guess what? They work exactly the same way as fiat pegged assets without the need to store tons of physical metals.

This thing is not going to be successful, no matter how hard you try. It either won't take off or it will die miserably.

I know. And we all gonna die.

First of all I was talking about the idea of having the blockchain create its own BitUSD. That was the main thing I was opposing, even if I am opposing BitUSD too.

BitUSD are secured by something extremely insecure and speculative. Only 25% of the chain is voting and nobody has cared to attack so far, but that doesn't mean that someone won't attack when he will have a lot to gain by attacking.

Imagine if we had a massive speculative bubble in BTS and lots of BitUSD were created while we were going up and then 80% crash occured. We've seen big drops in BTS and people should be used to this kind of moves? That means that there is no reason for that person to buy BitUSD again in order to unlock its collateral and then his collateral would be taken by the blockchain. Smartcoin are amazing at stealing value and putting it in the blockchain in this way.

Who would want to lock his money in something like this and what would he gain? The fact that they are working now, doesn't mean that they will keep working indefinitely. I still don't understand what is so hard for you to understand. Many ponzi schemes, bankrupt banks/states and failed projects like NuBits where fine for most of the time. Nobody realises until the crash. I have no more time to spend trying to prevent people from losing money. You either take my advice or leave it and pray that nothing bad is going to happen.

I have to point out that i used to be a big fan of BitAssets. I thought they were amazing and it took my a while to understand how they work, precisely because it didn't make any financial sense. I would also like to apologise to @tonyk who I personally attacked and thought he was an idiot. I couldn't understand why was he spending his time trying to reason with people that didn't have a clue about the things they were talking about (myself included) and I finally understand why bitcoin maximalists call altcoins scams... Yeah let's give liquidity rewards, let's pay interest, let's do everything bytemaster says in order to scam others, while he is scamming everyone.

[dxdxdx5889702]

I mean, bitcrab's proposal is good for the system to be used and to increase the customer.

[dxdxdx5889702]

You think the perfect solution, means that can not be promoted. I don't believe that windows is weaker than mac.

Please pay attention to what the negative rate of steem brings. Bitshares reduce the transfer fee with what.

[yvv]

You are mixing completely different concepts together. Bitshares is not a bank. Neither of crypto is. All investments are risky. Some of them are more risky and some are less risky. Collateral in bitshares is adjustable, it is the community who chose it to be as high as it is. You don't like BTS collateral? Then go ahead  and create assets which are fully backed by physical gold and silver. Good luck with that.

It isn't a different concept and I don't understand why do you get so confused. You take an extremely risky asset and you try to make it stable, which is abnormal. Never heard of : With Bitcoin you are your own bank? With BitShares it has gone as far as : You are your own bank and you can issue your own USD. You are the FED. Is it so bloody hard to understand that if we start printing our own USD, we are essentially like the FED? The fact that it is done in a decentralized fashion, by non-professionals, doesn't mean that it is going to be good. Somehow with crypto everyone things that he is a professional and he knows how do shit.

Chill out dude. You are not FED. Nobody here is. Never heard of secured loans? They are known to humankind for ages. BitAsset is nothing more than secured loan. Anything of value can be used as collateral, including crypto tokens. What problem do you have with this?

Why did you bring gold and silver up? I am talking about FIAT.

Make an account at openledger.info, search for bitGold and bitSilver. Guess what? They work exactly the same way as fiat pegged assets without the need to store tons of physical metals.

This thing is not going to be successful, no matter how hard you try. It either won't take off or it will die miserably.

I know. And we all gonna die.

[tarantulaz]

You are mixing completely different concepts together. Bitshares is not a bank. Neither of crypto is. All investments are risky. Some of them are more risky and some are less risky. Collateral in bitshares is adjustable, it is the community who chose it to be as high as it is. You don't like BTS collateral? Then go ahead  and create assets which are fully backed by physical gold and silver. Good luck with that.

It isn't a different concept and I don't understand why do you get so confused. You take an extremely risky asset and you try to make it stable, which is abnormal. Never heard of : With Bitcoin you are your own bank? With BitShares it has gone as far as : You are your own bank and you can issue your own USD. You are the FED. Is it so bloody hard to understand that if we start printing our own USD, we are essentially like the FED? The fact that it is done in a decentralized fashion, by non-professionals, doesn't mean that it is going to be good. Somehow with crypto everyone things that he is a professional and he knows how do shit.

Why did you bring gold and silver up? I am talking about FIAT. Normal easy  stuff, using secured customer deposits, that 100% risk free. I never said that I want to create token anyways. It is very early to introduce such a thing in any crypto, except if you have direct fiat gateways, that are fully insured.

This thing is not going to be successful, no matter how hard you try. It either won't take off or it will die miserably.

[yvv]

BitAssets will not need to rely on price feed from poloniex when UIAs which are pegged 1:1 to the underlying assets get more liquidity. Then you get the feed price for bitAssets from DEX order book.

This can lead to a massive failure. This is exactly what Nubits did. They relied on liquidity providers, rather than their reserves. Obviously BitShares use collateral which is much better than what they did, but nevertheless, really flawed. What happens if the liquidity goes away? Who guarantees constant liquidity? Who will want those BitUSD if BitShares goes to 0?

You are talking about things which are common to any financial asset out there as if it is a tragedy. What if SPD500 ETF goes to 0? Should we all die?

That doesn't make any sense. It is totally unrelated. The problem is that if traders want to trade BitUSD they need insurance that no matter what happens to BitShares that they will get their money. We are talking about a product of the company, which if it collapses its customers will lose their money. FXCM offers protection to all deposit. Does BitShares do that? No!

Would it make sense, if a solvent bank used its customers' deposits buyback their shares, just because its share price dropped? Bail-ins happen when someone is insolvent, not when his share price go down. 200% collateral or above is extremely inefficient too. If I had 200$, I would want to use all of them, not half. Again, I am talking about a scam invented by Bytemaster and that has too many risks. The last thing I want is BitShares to become NuShares 2.0... Ask @Chronos who lost a lot of money in his beloved NuBits scam...

You are mixing completely different concepts together. Bitshares is not a bank. Neither of crypto is. All investments are risky. Some of them are more risky and some are less risky. Collateral in bitshares is adjustable, it is the community who chose it to be as high as it is. You don't like BTS collateral? Then go ahead  and create assets which are fully backed by physical gold and silver. Good luck with that.

[tarantulaz]

BitAssets will not need to rely on price feed from poloniex when UIAs which are pegged 1:1 to the underlying assets get more liquidity. Then you get the feed price for bitAssets from DEX order book.

This can lead to a massive failure. This is exactly what Nubits did. They relied on liquidity providers, rather than their reserves. Obviously BitShares use collateral which is much better than what they did, but nevertheless, really flawed. What happens if the liquidity goes away? Who guarantees constant liquidity? Who will want those BitUSD if BitShares goes to 0?

You are talking about things which are common to any financial asset out there as if it is a tragedy. What if SPD500 ETF goes to 0? Should we all die?

That doesn't make any sense. It is totally unrelated. The problem is that if traders want to trade BitUSD they need insurance that no matter what happens to BitShares that they will get their money. We are talking about a product of the company, which if it collapses its customers will lose their money. FXCM offers protection to all deposit. Does BitShares do that? No!

Would it make sense, if a solvent bank used its customers' deposits buyback their shares, just because its share price dropped? Bail-ins happen when someone is insolvent, not when his share price go down. 200% collateral or above is extremely inefficient too. If I had 200$, I would want to use all of them, not half. Again, I am talking about a scam invented by Bytemaster and that has too many risks. The last thing I want is BitShares to become NuShares 2.0... Ask @Chronos who lost a lot of money in his beloved NuBits scam...

[prebuffo]

 Hallo, I'm a crypto trader and I was a Forex trader (I worked for an evil non commercial bank )
 I endorse this liquidity-by-workers proposal because I know the importance of the Market Maker to give some initial trust to every market (mainly dervative markets and every smartcoin IIS a DERVATE by Design. Market Makers, HAVE TO give to every asset a minimum liquidity trought a decent bid-ask spread.
 In this case we are not talking about milions of dollars so I think we can try this proposal.

Just My 2 cents.

[yvv]

BitAssets will not need to rely on price feed from poloniex when UIAs which are pegged 1:1 to the underlying assets get more liquidity. Then you get the feed price for bitAssets from DEX order book.

This can lead to a massive failure. This is exactly what Nubits did. They relied on liquidity providers, rather than their reserves. Obviously BitShares use collateral which is much better than what they did, but nevertheless, really flawed. What happens if the liquidity goes away? Who guarantees constant liquidity? Who will want those BitUSD if BitShares goes to 0?

You are talking about things which are common to any financial asset out there as if it is a tragedy. What if SPD500 ETF goes to 0? Should we all die?

[tarantulaz]

Our bitassets are not perfect pegged coins they have the flaws that you mention such as:
relying solely on the 10 million dollar market cap of BTS, relying on price feeds from poloniex, relying on witnesses for accurate prices.

BitAssets will not need to rely on price feed from poloniex when UIAs which are pegged 1:1 to the underlying assets get more liquidity. Then you get the feed price for bitAssets from DEX order book.

This can lead to a massive failure. This is exactly what Nubits did. They relied on liquidity providers, rather than their reserves. Obviously BitShares use collateral which is much better than what they did, but nevertheless, really flawed. What happens if the liquidity goes away? Who guarantees constant liquidity? Who will want those BitUSD if BitShares goes to 0?

You raise some interesting points and I agree with some of what you say.

- The committee is not to be fully trusted as it is run by humans who are fallible and inconsistent. 
- If this issuance of BitUSD was done autonomously by the blockchain then it would be a much better solution. (as steem dollars are issued)
- SDRs that you mentioned are just a basket of 5 major currencies and a BitSDR would just be another bitasset.
- dillution is limited to about 10 million bts a month
 
Our bitassets are not perfect pegged coins they have the flaws that you mention such as:
relying solely on the 10 million dollar market cap of BTS, relying on price feeds from poloniex, relying on witnesses for accurate prices.

However, these issues will be reduced if BTS is more widely adopted and the market cap improves. Even then the bitassets will not be perfect but they will be a better choice for many people. To me it was obvious that nubits would fail because of the human element, BTS is much smarter and much more decentralised and autonomous.  Perfect no, but the best chance I have seen to create a synthetic dollar that is not an IOU and cannot be controlled.
Remember BTS is an experiment.

The conversation in this thread has changed to worker proposals being paid in bitassets rather than just creating bitusd and selling it. Maybe I should start a new thread with this heading.

I agree that this is an experiment, but a rather dangerous one. How do you expect to trust so much money in it? Steem seems like a massive scam, that I can believe people can't see.

Also, the MakerDAO SDR isn't related to the IMF SDR. It has stable value, but isn't pegged on to any FIAT or 'real' world asset.

The dilution is limited, but what happens if the 200-1000% collateral is worth less than 1USD? That is the problem, not how much BitUSD we create. What will happen in the case of margin calls? Even if just some of the BitUSD are margin called, this will start a barrage of margin calls as the price of BTS starts collapsing.

[yvv]

Our bitassets are not perfect pegged coins they have the flaws that you mention such as:
relying solely on the 10 million dollar market cap of BTS, relying on price feeds from poloniex, relying on witnesses for accurate prices.

BitAssets will not need to rely on price feed from poloniex when UIAs which are pegged 1:1 to the underlying assets get more liquidity. Then you get the feed price for bitAssets from DEX order book.

[JonnyB]

In the past I would have agreed with this idea, but after what I've seen recently, I am going to oppose it. I used to think about creating BitUSD from the reserve pool, but there are negatives with it and there are many negatives smartcoins in general.

Dynamic peg is dangerous! NuBits failed and that should be a lesson to us as well. There are many dangers here, that people should look at :

What happens if the committee goes rogue or gets hacked? The more assets that exist, the harder it will be to stop the losses. It would take days for the community to vote for another committee. Most people here would agree that governments create more problems than they solve. Same should go here too. We've created something decentrilised, just to make it centralised again? Yes I know, we are the ones voting for the committee, but who guarantees that we are voting for the right people?

What is the best collateral ratio and who says what is best? What if BTS' price drops 80% in one day? MakerDAO is a clever idea that is taking this a step further with their special SDR solution, that gives one of their tokens stable value, but not pegged on to anything. BitShares holders don't gain much from those assets, but they are also not going to lose much in case something goes wrong. The price might go up because people are buying BTS, but that's irrelevant.

Why would someone buy BTS and convert them into BitUSD, when the only thing he does is to raise the value of BTS and then risk losing all his money in an extreme scenario where the price goes down? It doesn't make sense to risk so much, in order to get 50% or less in a form of a stable token and then probably end up losing up to 100% of your total value in during extreme situations. Nobody, with the right mind, would take that risk. Again this is addressed by MakerDAO, in a special way.

The whole SDB is a scam guys. You have to face it sooner than later. Same thing as Nubits. If there are no actual USD/CNY reserves, then these tokens rely wholly on speculation of BTS. That's what I'd call an amazing ponzi scheme. Yes a PONZI! Who do you think we are? The FED and we can print USD from our blockchain? This is mental guys. Not even the FED itself should have the ability to print dollars, let alone the BitShares community.

The value of those BitUSD solely relies only on people buying BTS and nothing else. As long as BTS has a 'price', they have some value. Even with limitless dilution there is a limit in the dilution which BTS can take before its price crashes and then ends up crashing the value of those BitUSD.
Markets are clever despite that they are irrational most of the time. There is a reason that BitShares are low in market cap and that smartcoins haven't gained traction. If you can't trust a bank or an exchange, what would make you trust a 10M start up? Dynamic peg is fiction and might be currently working under some certain conditions, but the fact that it could fail under specific ones, should be worrisome.

TL;DR
1) Dynamic peg = Fantasy
2) Printing our stable coins = Scam/Ponzi
3) Dynamic peg has no protection against : the exchanges we are fighting against (yes we take the price feed from exchanges),  the committee which decides the price feeds and depends solely on people constantly buying BTS on those exchange so that the price doesn't go to 0 or just even drop substantially.

You raise some interesting points and I agree with some of what you say.

- The committee is not to be fully trusted as it is run by humans who are fallible and inconsistent. 
- If this issuance of BitUSD was done autonomously by the blockchain then it would be a much better solution. (as steem dollars are issued)
- SDRs that you mentioned are just a basket of 5 major currencies and a BitSDR would just be another bitasset.
- dillution is limited to about 10 million bts a month
 
Our bitassets are not perfect pegged coins they have the flaws that you mention such as:
relying solely on the 10 million dollar market cap of BTS, relying on price feeds from poloniex, relying on witnesses for accurate prices.

However, these issues will be reduced if BTS is more widely adopted and the market cap improves. Even then the bitassets will not be perfect but they will be a better choice for many people. To me it was obvious that nubits would fail because of the human element, BTS is much smarter and much more decentralised and autonomous.  Perfect no, but the best chance I have seen to create a synthetic dollar that is not an IOU and cannot be controlled.
Remember BTS is an experiment.

The conversation in this thread has changed to worker proposals being paid in bitassets rather than just creating bitusd and selling it. Maybe I should start a new thread with this heading.

[tarantulaz]

In the past I would have agreed with this idea, but after what I've seen recently, I am going to oppose it. I used to think about creating BitUSD from the reserve pool, but there are negatives with it and there are many negatives smartcoins in general.

Dynamic peg is dangerous! NuBits failed and that should be a lesson to us as well. There are many dangers here, that people should look at :

What happens if the committee goes rogue or gets hacked? The more assets that exist, the harder it will be to stop the losses. It would take days for the community to vote for another committee. Most people here would agree that governments create more problems than they solve. Same should go here too. We've created something decentrilised, just to make it centralised again? Yes I know, we are the ones voting for the committee, but who guarantees that we are voting for the right people?

What is the best collateral ratio and who says what is best? What if BTS' price drops 80% in one day? MakerDAO is a clever idea that is taking this a step further with their special SDR solution, that gives one of their tokens stable value, but not pegged on to anything. BitShares holders don't gain much from those assets, but they are also not going to lose much in case something goes wrong. The price might go up because people are buying BTS, but that's irrelevant.

Why would someone buy BTS and convert them into BitUSD, when the only thing he does is to raise the value of BTS and then risk losing all his money in an extreme scenario where the price goes down? It doesn't make sense to risk so much, in order to get 50% or less in a form of a stable token and then probably end up losing up to 100% of your total value in during extreme situations. Nobody, with the right mind, would take that risk. Again this is addressed by MakerDAO, in a special way.

The whole SDB is a scam guys. You have to face it sooner than later. Same thing as Nubits. If there are no actual USD/CNY reserves, then these tokens rely wholly on speculation of BTS. That's what I'd call an amazing ponzi scheme. Yes a PONZI! Who do you think we are? The FED and we can print USD from our blockchain? This is mental guys. Not even the FED itself should have the ability to print dollars, let alone the BitShares community.

The value of those BitUSD solely relies only on people buying BTS and nothing else. As long as BTS has a 'price', they have some value. Even with limitless dilution there is a limit in the dilution which BTS can take before its price crashes and then ends up crashing the value of those BitUSD.
Markets are clever despite that they are irrational most of the time. There is a reason that BitShares are low in market cap and that smartcoins haven't gained traction. If you can't trust a bank or an exchange, what would make you trust a 10M start up? Dynamic peg is fiction and might be currently working under some certain conditions, but the fact that it could fail under specific ones, should be worrisome.

TL;DR
1) Dynamic peg = Fantasy
2) Printing our stable coins = Scam/Ponzi
3) Dynamic peg has no protection against : the exchanges we are fighting against (yes we take the price feed from exchanges),  the committee which decides the price feeds and depends solely on people constantly buying BTS on those exchange so that the price doesn't go to 0 or just even drop substantially.

[yvv]

Another solution would fit nicely would be that all worker proposals are paid in BitUSD but this would require a hard fork.

That's not true. I proposed on several occasions to create a new multisig account (owned by the committee) that actually creates the workers for people looking to work for BitShares, gets the BTS and borrows bitUSD at ratio 3x or more) to pay them to the "employee" ...
All we need to do is to agree on this process since the shareholder needs to pay 3x - MORE for the worker in BTS terms to fund the collateral.

I'm glad you agree this would be a suitable alternative. We should look to develop this idea further.
When I said it would require a hard fork I meant for it to be done in a decentralised way. 
Yes the committee-account could pay BitUSD to workers that mirrors the pay that they receive for their own worker proposals. (but this isn't very elegant)
The ultimate solution would be if all workers were paid in Bitusd that was created autonomously using the funds in the reserve pool as backing. (this would need a hard fork)

Worker pay should not necessarily be limited to bitUSD. A worker may choose another bitAsset to receive payment. Implementing this through worker proposal is easy to do without any changes in protocol. This could be done now for testing, and if it works as intended it could be coded into the protocol later.

The reserve pool is all BTS. BitUSD is created through debt.  Where would the corresponding debt be held?

Committee (or whoever is elected to run a cashier worker) would create an account which receives entire daily worker budget, issues bitUSD, bitCNY, bitBTC etc and pays to other workers. Unspent budget, if any, would be returned to the reserve or used to settle debt. Current workers may continue to be payed in BTS until they expire.

[JonnyB]

Another solution would fit nicely would be that all worker proposals are paid in BitUSD but this would require a hard fork.

That's not true. I proposed on several occasions to create a new multisig account (owned by the committee) that actually creates the workers for people looking to work for BitShares, gets the BTS and borrows bitUSD at ratio 3x or more) to pay them to the "employee" ...
All we need to do is to agree on this process since the shareholder needs to pay 3x - MORE for the worker in BTS terms to fund the collateral.

I'm glad you agree this would be a suitable alternative. We should look to develop this idea further.
When I said it would require a hard fork I meant for it to be done in a decentralised way. 
Yes the committee-account could pay BitUSD to workers that mirrors the pay that they receive for their own worker proposals. (but this isn't very elegant)
The ultimate solution would be if all workers were paid in Bitusd that was created autonomously using the funds in the reserve pool as backing. (this would need a hard fork)

Worker pay should not necessarily be limited to bitUSD. A worker may choose another bitAsset to receive payment. Implementing this through worker proposal is easy to do without any changes in protocol. This could be done now for testing, and if it works as intended it could be coded into the protocol later.

The reserve pool is all BTS. BitUSD is created through debt.  Where would the corresponding debt be held?

[yvv]

Another solution would fit nicely would be that all worker proposals are paid in BitUSD but this would require a hard fork.

That's not true. I proposed on several occasions to create a new multisig account (owned by the committee) that actually creates the workers for people looking to work for BitShares, gets the BTS and borrows bitUSD at ratio 3x or more) to pay them to the "employee" ...
All we need to do is to agree on this process since the shareholder needs to pay 3x - MORE for the worker in BTS terms to fund the collateral.

I'm glad you agree this would be a suitable alternative. We should look to develop this idea further.
When I said it would require a hard fork I meant for it to be done in a decentralised way. 
Yes the committee-account could pay BitUSD to workers that mirrors the pay that they receive for their own worker proposals. (but this isn't very elegant)
The ultimate solution would be if all workers were paid in Bitusd that was created autonomously using the funds in the reserve pool as backing. (this would need a hard fork)

Worker pay should not necessarily be limited to bitUSD. A worker may choose another bitAsset to receive payment. Implementing this through worker proposal is easy to do without any changes in protocol. This could be done now for testing, and if it works as intended it could be coded into the protocol later.

[JonnyB]

Another solution would fit nicely would be that all worker proposals are paid in BitUSD but this would require a hard fork.

That's not true. I proposed on several occasions to create a new multisig account (owned by the committee) that actually creates the workers for people looking to work for BitShares, gets the BTS and borrows bitUSD at ratio 3x or more) to pay them to the "employee" ...
All we need to do is to agree on this process since the shareholder needs to pay 3x - MORE for the worker in BTS terms to fund the collateral.

I'm glad you agree this would be a suitable alternative. We should look to develop this idea further.
When I said it would require a hard fork I meant for it to be done in a decentralised way. 
Yes the committee-account could pay BitUSD to workers that mirrors the pay that they receive for their own worker proposals. (but this isn't very elegant)
The ultimate solution would be if all workers were paid in Bitusd that was created autonomously using the funds in the reserve pool as backing. (this would need a hard fork)

[Akado]

Another solution would fit nicely would be that all worker proposals are paid in BitUSD but this would require a hard fork.

That's not true. I proposed on several occasions to create a new multisig account (owned by the committee) that actually creates the workers for people looking to work for BitShares, gets the BTS and borrows bitUSD at ratio 3x or more) to pay them to the "employee" ...
All we need to do is to agree on this process since the shareholder needs to pay 3x - MORE for the worker in BTS terms to fund the collateral.

wouldn't that be positive since workers wouldn't inflate? bts would be instantly locked while increasing bitassets supply. true, it wouldn't reduce available supply since it came from the reserve pool, but at least we wouldn't have bts dumped. It would most likely be traded for bitcoin and then withdrawn, increasing volume and liquidity

[Chris4210]

Yes, I mean around 200 BTC inflow in the Bitshares platform per day.

BlockPay works like that.
We have 40 Ambassadors in around 20 countries. If each Ambassador signs up 5 stores per month, we start with around 200 BlockPay installation on the market. We will start with Bitcoin meetups, bars, and restaurants who just have to download the free app and can accept Bitcoin payments at zero costs.  Business are still paying with Coinbase, Xapo etc.

200 BlockPays with let us say 1 BTC (550 USD) per day in Bitcoin sales brings in 200 BTC/day.

But how does it work?

BlockPay generates a Bitcoin QR-Code from our partner Blocktrades.us and the money will be converted through Blocktrades in BitUSD, BitEUR, BitCNY.

Bitcoin->Blocktrades->BitUSD ->?

What are the Merchant options?

a) Sell BitUSD for USD
b) Sell BitUSD for BTC to USD
c) Settle BitUSD for BTS to BTC to USD
d) Keep BitUSD and pay bills, salaries and other services from other partners ( Do you have a service for bitUSD )

No matter what the business will do with their BitUSD, they will get it. And we will have a big increase in Liq on BitShares.

Would a merchant have to do the "bitUSD to USD" conversion himself by hand or can he set it up to do it automatically after so many transactions?  Doing it himself could be a deterrent to using BlockPay.

At the beginning, the Merchant has to do the conversion from BitUSD to USD by himself. Since that can be very confusing, we want to build a very simple merchant wallet where he can do the transfer and withdraw his funds to his bank account. The conversion will be handled by selected gateways.

[BunkerChainLabs-DataSecurityNode]

There is the problem to it. .. Everyone freaks out when they see the amount of BTS being asked for.. regardless of the conversion.. its the number they see they are voting on.

Other than the human issue.. I think its a fantastic idea though.

Thinking about it .. it's actually not an issue at all .. if they pay 3x the BTS .. only 1/3 will be payed to the worker .. and 2/3 will be "leverage" on BTS ..
Interestingly .. we can do BOTH .. at the same time .. the worker can create his own worker paying BTS .. and the committee-owned worker account can create the same worker asking for 3x the BTS with the promise to pay the original worker in USD and have leverage on BTS .. If the ordinary worker is voted in .. anything the committee worker receives can be kept (or returns) as owned by the committee and thus shareholders anyway .. nothing to loose ..

I like that also because it adds a degree of 'curation' to the process.... but in this case we then have to maintain 2 workers being voted in if I understand this correctly. What happens when one is voted in but the other is not?

[xeroc]

There is the problem to it. .. Everyone freaks out when they see the amount of BTS being asked for.. regardless of the conversion.. its the number they see they are voting on.

Other than the human issue.. I think its a fantastic idea though.

Thinking about it .. it's actually not an issue at all .. if they pay 3x the BTS .. only 1/3 will be payed to the worker .. and 2/3 will be "leverage" on BTS ..
Interestingly .. we can do BOTH .. at the same time .. the worker can create his own worker paying BTS .. and the committee-owned worker account can create the same worker asking for 3x the BTS with the promise to pay the original worker in USD and have leverage on BTS .. If the ordinary worker is voted in .. anything the committee worker receives can be kept (or returns) as owned by the committee and thus shareholders anyway .. nothing to loose ..

[kingslanding]

Yes, I mean around 200 BTC inflow in the Bitshares platform per day.

BlockPay works like that.
We have 40 Ambassadors in around 20 countries. If each Ambassador signs up 5 stores per month, we start with around 200 BlockPay installation on the market. We will start with Bitcoin meetups, bars, and restaurants who just have to download the free app and can accept Bitcoin payments at zero costs.  Business are still paying with Coinbase, Xapo etc.

200 BlockPays with let us say 1 BTC (550 USD) per day in Bitcoin sales brings in 200 BTC/day.

But how does it work?

BlockPay generates a Bitcoin QR-Code from our partner Blocktrades.us and the money will be converted through Blocktrades in BitUSD, BitEUR, BitCNY.

Bitcoin->Blocktrades->BitUSD ->?

What are the Merchant options?

a) Sell BitUSD for USD
b) Sell BitUSD for BTC to USD
c) Settle BitUSD for BTS to BTC to USD
d) Keep BitUSD and pay bills, salaries and other services from other partners ( Do you have a service for bitUSD )

No matter what the business will do with their BitUSD, they will get it. And we will have a big increase in Liq on BitShares.

Would a merchant have to do the "bitUSD to USD" conversion himself by hand or can he set it up to do it automatically after so many transactions?  Doing it himself could be a deterrent to use Blockpay.

[BunkerChainLabs-DataSecurityNode]

I am still yet to hear any convincing reason why this proposal could have a negative effect on bitshares.
Is there a consensus among the committee that demand for BitUSD is not the issue, it is the supply of BitUSD that is the issue?
If not from a worker proposal where does the committee suggest this supply should come from?

Another solution would fit nicely would be that all worker proposals are paid in BitUSD but this would require a hard fork.

@xeroc @bitcrab @Bhuz  @clayop @bitcube @abit @dele-puppy @BunkerChain Labs @ebit @Chris4210 @Harvey-xts

Initially I thought this was a good idea.. but the more I thought about it the more I saw too many issues as have been stated by different people.

[BunkerChainLabs-DataSecurityNode]

Another solution would fit nicely would be that all worker proposals are paid in BitUSD but this would require a hard fork.

That's not true. I proposed on several occasions to create a new multisig account (owned by the committee) that actually creates the workers for people looking to work for BitShares, gets the BTS and borrows bitUSD at ratio 3x or more) to pay them to the "employee" ...
All we need to do is to agree on this process since the shareholder needs to pay 3x - MORE for the worker in BTS terms to fund the collateral.

There is the problem to it. .. Everyone freaks out when they see the amount of BTS being asked for.. regardless of the conversion.. its the number they see they are voting on.

Other than the human issue.. I think its a fantastic idea though.

[xeroc]

Another solution would fit nicely would be that all worker proposals are paid in BitUSD but this would require a hard fork.

That's not true. I proposed on several occasions to create a new multisig account (owned by the committee) that actually creates the workers for people looking to work for BitShares, gets the BTS and borrows bitUSD at ratio 3x or more) to pay them to the "employee" ...
All we need to do is to agree on this process since the shareholder needs to pay 3x - MORE for the worker in BTS terms to fund the collateral.

[ebit]

I am still yet to hear any convincing reason why this proposal could have a negative effect on bitshares.
Is there a consensus among the committee that demand for BitUSD is not the issue, it is the supply of BitUSD that is the issue?
If not from a worker proposal where does the committee suggest this supply should come from?

Another solution would fit nicely would be that all worker proposals are paid in BitUSD but this would require a hard fork.

@xeroc @bitcrab @Bhuz  @clayop @bitcube @abit @dele-puppy @BunkerChain Labs @ebit @Chris4210 @Harvey-xts

Trying to control the money supply in order to induce a bubble is very fed-ish.

Yes it may work to bolster bts in the short term, but it goes against the principles of many members.

Yes,Who want to increase bitusd，please short your bts by yourself .don't stare at others.

[lil_jay890]

I am still yet to hear any convincing reason why this proposal could have a negative effect on bitshares.
Is there a consensus among the committee that demand for BitUSD is not the issue, it is the supply of BitUSD that is the issue?
If not from a worker proposal where does the committee suggest this supply should come from?

Another solution would fit nicely would be that all worker proposals are paid in BitUSD but this would require a hard fork.

@xeroc @bitcrab @Bhuz  @clayop @bitcube @abit @dele-puppy @BunkerChain Labs @ebit @Chris4210 @Harvey-xts

Trying to control the money supply in order to induce a bubble is very fed-ish.

Yes it may work to bolster bts in the short term, but it goes against the principles of many members. As a long term affect I believe it would further the belief that bts is centralized.  The effects of bts being more centralized are unknown, but I think centralization perception is the leading cause of the bts bear market.

[JonnyB]

I am still yet to hear any convincing reason why this proposal could have a negative effect on bitshares.
Is there a consensus among the committee that demand for BitUSD is not the issue, it is the supply of BitUSD that is the issue?
If not from a worker proposal where does the committee suggest this supply should come from?

Another solution would fit nicely would be that all worker proposals are paid in BitUSD but this would require a hard fork.

@xeroc @bitcrab @Bhuz  @clayop @bitcube @abit @dele-puppy @BunkerChain Labs @ebit @Chris4210 @Harvey-xts

[lil_jay890]

bitCNY supply has almost tripled since the optimization recommended by bitcrab...

If we want bitUSD to become more liquid and have a tighter peg, we have a proven template... without the need to tap the reserve funds

Coincidence does not necessarily mean causality.

True, but it was the only smartcoin to increase its supply drastically. It was also the only coin to have the optimization. If the increase was not due to the optimization, I would expect the other smartcoins would have also increased their supply.  But they did not.

Perhaps we should try the optimization on a smartcoin that's not bitUSD to see if the same results as bitCNY can be achieved.

[yvv]

Yes, I mean around 200 BTC inflow in the Bitshares platform per day.

BlockPay works like that.
We have 40 Ambassadors in around 20 countries. If each Ambassador signs up 5 stores per month, we start with around 200 BlockPay installation on the market. We will start with Bitcoin meetups, bars, and restaurants who just have to download the free app and can accept Bitcoin payments at zero costs.  Business are still paying with Coinbase, Xapo etc.

200 BlockPays with let us say 1 BTC (550 USD) per day in Bitcoin sales brings in 200 BTC/day.

But how does it work?

BlockPay generates a Bitcoin QR-Code from our partner Blocktrades.us and the money will be converted through Blocktrades in BitUSD, BitEUR, BitCNY.

Bitcoin->Blocktrades->BitUSD ->?

What are the Merchant options?

a) Sell BitUSD for USD
b) Sell BitUSD for BTC to USD
c) Settle BitUSD for BTS to BTC to USD
d) Keep BitUSD and pay bills, salaries and other services from other partners ( Do you have a service for bitUSD )

No matter what the business will do with their BitUSD, they will get it. And we will have a big increase in Liq on BitShares.

These are sweet dreams. Let's see if they will ever come true.

[yvv]

bitCNY supply has almost tripled since the optimization recommended by bitcrab...

If we want bitUSD to become more liquid and have a tighter peg, we have a proven template... without the need to tap the reserve funds

Coincidence does not necessarily mean causality.

 

[Chris4210]

Yes, I mean around 200 BTC inflow in the Bitshares platform per day.

BlockPay works like that.
We have 40 Ambassadors in around 20 countries. If each Ambassador signs up 5 stores per month, we start with around 200 BlockPay installation on the market. We will start with Bitcoin meetups, bars, and restaurants who just have to download the free app and can accept Bitcoin payments at zero costs.  Business are still paying with Coinbase, Xapo etc.

200 BlockPays with let us say 1 BTC (550 USD) per day in Bitcoin sales brings in 200 BTC/day.

But how does it work?

BlockPay generates a Bitcoin QR-Code from our partner Blocktrades.us and the money will be converted through Blocktrades in BitUSD, BitEUR, BitCNY.

Bitcoin->Blocktrades->BitUSD ->?

What are the Merchant options?

a) Sell BitUSD for USD
b) Sell BitUSD for BTC to USD
c) Settle BitUSD for BTS to BTC to USD
d) Keep BitUSD and pay bills, salaries and other services from other partners ( Do you have a service for bitUSD )

No matter what the business will do with their BitUSD, they will get it. And we will have a big increase in Liq on BitShares.

[JonnyB]

Ok, so we don´t have enough people who would like to sell their BitUSD?

How will our situation change if:
- 200 BTC flow into BitShares every day, and will be converted into BitUSD
-  50% of the new BitUSD will be sold to on the market because they want to cash out

If the BitUSD cannot be sold against USD, the BitUSD has to be settle and the BTS has to be sold to get the equivalent amount in USD back.

We will have that situation in a few weeks after the launch of BlockPay. Any BitUSD buyers?

This sounds incredible if true.
When you say converted into BitUSD what do you mean ?
If you mean use the BTC to buy BitUSD you won't be able to as nobody will sell you that amount of BitUSD  without huge mark ups.
If you mean selling the 200btc for BTS then creating the BitUSD and then selling it  you will have money tied up in collateral for the BitUSD you just sold.

[lil_jay890]

bitCNY supply has almost tripled since the optimization recommended by bitcrab...

If we want bitUSD to become more liquid and have a tighter peg, we have a proven template... without the need to tap the reserve funds

[Pheonike]

personally I do not like this idea, business should be done by businessmen.

I dislike this as well and have cast that vote multiple times already.
For me, this is not the time to use our reserves to improve the liquidity .. not yet..

Can you give reasons why?

I think it has something to do with the lack of utility that thus is not driving any real demand. By doing something like this 'today' we are creating an artificial market that is more likely to lead to something like nubits than towards growing.

That's just my guess anyways.. not a trader!

What do you mean? At minimum a hedge against btc is a utility. Look at this  btc dump. I used tether on polo to hedge. Would have been nice to have used bitusd.

Sent from my SM-N920T using Tapatalk

[Akado]

Ok, so we don´t have enough people who would like to sell their BitUSD?

How will our situation change if:
- 200 BTC flow into BitShares every day, and will be converted into BitUSD
-  50% of the new BitUSD will be sold to on the market because they want to cash out

If the BitUSD cannot be sold against USD, the BitUSD has to be settle and the BTS has to be sold to get the equivalent amount in USD back.

We will have that situation in a few weeks after the launch of BlockPay. Any BitUSD buyers?

You mean just "200 btc" or you really meant 200btc/day? Although that would be the best thing to have ever happened to BTS, it sounds like a stretch... a huge, huge stretch.

keep up the good work with BlockPay 

[Chris4210]

Ok, so we don´t have enough people who would like to sell their BitUSD?

How will our situation change if:
- 200 BTC flow into BitShares every day, and will be converted into BitUSD
-  50% of the new BitUSD will be sold to on the market because they want to cash out

If the BitUSD cannot be sold against USD, the BitUSD has to be settle and the BTS has to be sold to get the equivalent amount in USD back.

We will have that situation in a few weeks after the launch of BlockPay. Any BitUSD buyers?

[paliboy]

long time no post by me, real life took off in a good way so I couldn't keep up with crypto world -  but what johnnybitcoin is saying is what I have been saying for 2+ years about bitshares 2.0. There is a bitasset buyer of laser resort (settlement), but there is no bitasset seller of last resort. In bitasset supply and demand terms, the system properly destroys bitassets when there is an oversupply (settlement), but there is no mechanism to have the system create bitassets when there is an undersupply. Supply is created by speculators, which causes a chicken-or-the-egg problem: speculators won't create supply in a market with low liquidity for fear of being trapped with no seller of last resort, so a low liquidity market remains low liquidity.

Using reserves/worker as a buy wall gives BTS the missing feature of creation of bitassets when demand exceeds supply (and the market is too thin to meet supply).

Thank you, couldn't have said it better myself.

"Bitassets have a buyer of last resort. They are missing a seller of last resort."

  people are not willing to sell even with 10% premium, few examples:

https://bitshares.openledger.info/#/market/JPY_BTS
https://bitshares.openledger.info/#/market/HKD_BTS
https://bitshares.openledger.info/#/market/GBP_BTS

[JonnyB]

Topic starter suggests to provide liquidity with brute force, by taking all bids above the feed price on regular basis. Of course, MM account will be at loss this way, and traders will game it. Imo, it is ok to use reserve for market making, but strategy must be better than this. There should be a plan for issuing AND liquidating bitAsset. And liquidity should be provided both ways, for buyers and for sellers.

Sellers always have 100% liquidity, they can always sell at the peg, this what forced settlement is. We only need to provide liquidity for buyers.

long time no post by me, real life took off in a good way so I couldn't keep up with crypto world -  but what johnnybitcoin is saying is what I have been saying for 2+ years about bitshares 2.0. There is a bitasset buyer of laser resort (settlement), but there is no bitasset seller of last resort. In bitasset supply and demand terms, the system properly destroys bitassets when there is an oversupply (settlement), but there is no mechanism to have the system create bitassets when there is an undersupply. Supply is created by speculators, which causes a chicken-or-the-egg problem: speculators won't create supply in a market with low liquidity for fear of being trapped with no seller of last resort, so a low liquidity market remains low liquidity.

Using reserves/worker as a buy wall gives BTS the missing feature of creation of bitassets when demand exceeds supply (and the market is too thin to meet supply).

Thank you, couldn't have said it better myself.

"Bitassets have a buyer of last resort. They are missing a seller of last resort."

[maqifrnswa]

Topic starter suggests to provide liquidity with brute force, by taking all bids above the feed price on regular basis. Of course, MM account will be at loss this way, and traders will game it. Imo, it is ok to use reserve for market making, but strategy must be better than this. There should be a plan for issuing AND liquidating bitAsset. And liquidity should be provided both ways, for buyers and for sellers.

Sellers always have 100% liquidity, they can always sell at the peg, this what forced settlement is. We only need to provide liquidity for buyers.

long time no post by me, real life took off in a good way so I couldn't keep up with crypto world -  but what johnnybitcoin is saying is what I have been saying for 2+ years about bitshares 2.0. There is a bitasset buyer of laser resort (settlement), but there is no bitasset seller of last resort. In bitasset supply and demand terms, the system properly destroys bitassets when there is an oversupply (settlement), but there is no mechanism to have the system create bitassets when there is an undersupply. Supply is created by speculators, which causes a chicken-or-the-egg problem: speculators won't create supply in a market with low liquidity for fear of being trapped with no seller of last resort, so a low liquidity market remains low liquidity.

Using reserves/worker as a buy wall gives BTS the missing feature of creation of bitassets when demand exceeds supply (and the market is too thin to meet supply).

[JonnyB]

Topic starter suggests to provide liquidity with brute force, by taking all bids above the feed price on regular basis. Of course, MM account will be at loss this way, and traders will game it. Imo, it is ok to use reserve for market making, but strategy must be better than this. There should be a plan for issuing AND liquidating bitAsset. And liquidity should be provided both ways, for buyers and for sellers.

Sellers always have 100% liquidity, they can always sell at the peg, this what forced settlement is. We only need to provide liquidity for buyers.

Forced settlement is the last resort for holders to protect them from illiquid market, and it has limitations such as delay, offset and limited volume. Sellers still need market liquidity.

The offset and limited volume will only be become an issue if it gets voted for, it's not an issue yet. 
Another way that would help a lot with liquidity would the ability to place relative orders that move in line with the settlement price. Then for example i could place a buy order that is 0.1 % over the settlement and not havve to worry about the price shifting.

[BunkerChainLabs-DataSecurityNode]

personally I do not like this idea, business should be done by businessmen.

I dislike this as well and have cast that vote multiple times already.
For me, this is not the time to use our reserves to improve the liquidity .. not yet..

Can you give reasons why?

I think it has something to do with the lack of utility that thus is not driving any real demand. By doing something like this 'today' we are creating an artificial market that is more likely to lead to something like nubits than towards growing.

That's just my guess anyways.. not a trader!

[yvv]

Topic starter suggests to provide liquidity with brute force, by taking all bids above the feed price on regular basis. Of course, MM account will be at loss this way, and traders will game it. Imo, it is ok to use reserve for market making, but strategy must be better than this. There should be a plan for issuing AND liquidating bitAsset. And liquidity should be provided both ways, for buyers and for sellers.

Sellers always have 100% liquidity, they can always sell at the peg, this what forced settlement is. We only need to provide liquidity for buyers.

Forced settlement is the last resort for holders to protect them from illiquid market, and it has limitations such as delay, offset and limited volume. Sellers still need market liquidity.

[JonnyB]

personally I do not like this idea, business should be done by businessmen.

I dislike this as well and have cast that vote multiple times already.
For me, this is not the time to use our reserves to improve the liquidity .. not yet..

Can you give reasons why?

[JonnyB]

Topic starter suggests to provide liquidity with brute force, by taking all bids above the feed price on regular basis. Of course, MM account will be at loss this way, and traders will game it. Imo, it is ok to use reserve for market making, but strategy must be better than this. There should be a plan for issuing AND liquidating bitAsset. And liquidity should be provided both ways, for buyers and for sellers.

Sellers always have 100% liquidity, they can always sell at the peg, this what forced settlement is. We only need to provide liquidity for buyers.

[xeroc]

personally I do not like this idea, business should be done by businessmen.

I dislike this as well and have cast that vote multiple times already.
For me, this is not the time to use our reserves to improve the liquidity .. not yet..

[yvv]

Topic starter suggests to provide liquidity with brute force, by taking all bids above the feed price on regular basis. Of course, MM account will be at loss this way, and traders will game it. Imo, it is ok to use reserve for market making, but strategy must be better than this. There should be a plan for issuing AND liquidating bitAsset. And liquidity should be provided both ways, for buyers and for sellers.

[cube]

WHAT HAPPENS IF THE COMMITTEE MAKES A LOSS
If bitshare go up the committee-trade account will make a profit.
If bitshares goes down the committee-trade account will make a loss.
It doesn't matter. However my guess would be it makes a profit.
Making a profit and avoiding a loss would be a bonus but the purpose is to get more BitUSD out in the wild not to make money.

Thanks for bringing up this liquidity bootstrap idea and getting a lively discussion going.  I am all for increasing liquidity but I like to have a detailed carefully draft out plan before going ahead. 

Making a loss does matter, especailly if the espected liquidity did not happen but some users gained from 'wrongly' executed orders by the committee-trade members.  A loss means a loss for the bts shareholders.  At what price (loss) when it becomes too much for the shareholders to bear?  We should mitigate this risk as much as possible.  My concerns are:

1) Committee members are not traders and do not have the necessary experiences nor know-how to trade without making (significant) losses or gamed by experienced traders

2) How to make this into a self-sustainable process and when would it become profitable for users/shorters to step in and take over from this committee-run liquidity-subsidy effort?

[karnal]

Theres plenty of willing buyers for bitUSD but nobody wants to buy with huge mark ups.

I wish you were right. At the moment there are bids for 145 bitUSD at prices +-2% of feed price and 31 bitUSD at prices +-1% of feed price.

FWIW, personally I do not bother adding orders for BitUSD because the spread is always huge and there is no stop-loss feature in graphene, which means a distraction would cost me money.

I'd bet many others are in the same position and simply don't bother placing an order.. especially when BitCNY is decently liquid.

I would rather hodl USD, but if I can get my order filled instantly or in minutes with CNY ..

[ebit]

Worker is used for coding.
BitCNY is growing fast,Why?

Or we need a lawsuit，and tell the world what is bitUSD.

[paliboy]

I suggest that we either adjust bitUSD's parameters first (see https://bitsharestalk.org/index.php/topic,22936.msg297124) or start with bitCNY.

After I saw what happens when a DAC wastes all of its assets (see what happened in Nushares/Nubits), we should be very careful with reserves, i.e. if this gets support and even though profit isn't goal, commitee should aim to at least break even. Therefore I think that collateral ratio should be set as high as practically possible (my suggestion would be at least 3).

Committee's smartcoins being force settled does matter - it causes dilution with unpredictable outcomes.

[JonnyB]

personally I do not like this idea, business should be done by businessmen.

This is not helpful. You need to explain how the committee creating a supply of BitUSD and selling it to those who want it could be negative.
Why would a businessman create and sell a bit asset if he cannot buy it back in the future to close his position?

[pc]

personally I do not like this idea, business should be done by businessmen.

[JonnyB]

Totally support the idea of actively managing the reserve funds to increase bitAsset liquidity. Here is financial model which could work:

1. Create a worker which receives 100K BTS per day (or whatever voters decide).
2. The worker uses available funds to issue bitUSD and build a sell wall at call price up to 1K bitUSD. If the wall drops below 1K, issue more bitUSD to raise it back.
3. Use available funds to build a buy wall at feed price up to 1K bitUSD. If the wall drops below 1K, settle debt and raise it back.
4. Adjust bid/ask orders to match the current feed/call price hourly.
5. Adjust collateral ratio to safe level hourly.
6. Send unspent funds (if any) back to reserve every week.

If this works:
I Raise the walls to 10K bitUSD.
II Apply this scheme to other bitAssets.

Comments? Can this be automated?

That is a good roadmap to add liquidity. I create a google spreadsheet model for that, including the worker script and current price feeds.
https://docs.google.com/spreadsheets/d/1Zj7b0OCBBx_WYeDJWGdot3454UOTb5zJfZp2ulROfxQ/edit?usp=sharing

When we want to use: committee-trade
then we need to talk to:
Active
- bhuz   
- bitcube
- abit
- dele-puppy
- xeroc

@Bhuz @bitcube @abit @dele-puppy @xeroc

They are in charge of the account and should be able to set up a script as described by yvv.  I would suggest we start with USD and CNY first and test 90-150 days how the program works. It takes around 55 days to set up the 10k wall. It will take probably longer since more and more people will buy BitUSD.

The account can reuse the BTS he receives to create more BitAssets and sells them off.

What are the challenges?
- What if the BTS drops rapidly?
- At what price offset should be the sell wall?
- What happens if somebody buys up the complete wall? What comes next?
- How do we manage the debts of committee-trade once the worker is over?

Thanks for making this spreadsheet.

COLLATERAL RATIO
I have been thinking about the collateral backing for this committee created BitUSD. 
My initial thought was we don't want it to get force settled so we should have a high collateral ratio.
But then I realised the lowest collateralised BitUSD gets settled first meaning all the private bitUSD creators might be force settled in front of the committee's BitUSD.
So it might be better for the committee's created BitUSD to be the least collateralised so as not to dishearten private creators.

When the Committee's BitUSD is inevitably force settled it can just be recreated again until the debts of the committee-trade account are exactly the amount that has been agreed.

My conclusion is 2.5 collateral ratio isn't too low as it doesn't matter if it gets force settled.

DISTANCE FROM PEG TO SELL AT
Obviously we should never sell below the settlement price because anyone could buy it below settlement then force settle it in 24hrs for a profit as I have done in the past.
Also the bitshares price can move more than 5% in a day so if the committee place the sell order 5% over the settlement price and bts drops 6% in a day we will be in a position where the sell order is 1% below the settlement price.
The ultimate solution to this problem would be if bitshares had the ability to place relative orders where you could place orders that move up and down with the settlement price so that it is always priced at exactly over. However this is not possible unless within bitshares now with out using an external bot system.
The current proposal of 100k per day would produce $5447 BitUSD per month using the spreadsheet numbers which is roughly $1361 a week.
This is not a lot of money to be adding each week and I think it should be sold to the highest bids that are over the settlement price at the same time each week.
The goal of this proposal is to get more BitUSD into circulation so even if a whale buys it all up in one go each week this is still good for liquidity.
Unfortunately we need to be creating much more than $5447 but if we tripled it that would be almost the entire dilution budget.
I don't think we will have sell walls for quite sometime. We need to greatly increase the amount of debt free BitUSD in existence and hopefully the traders will create sell walls themselves due to them not be scared of lack of new supply.

My conclusion is that the selling of these creating BitUSD doesn't need to be managed on an hourly/daily basis just a weekly sale to the highest bids at exactly the same time each week. As long as the bids are higher than the settlement price all is good.

WHAT HAPPENS IF THE COMMITTEE MAKES A LOSS
If bitshare go up the committee-trade account will make a profit.
If bitshares goes down the committee-trade account will make a loss.
It doesn't matter. However my guess would be it makes a profit.
Making a profit and avoiding a loss would be a bonus but the purpose is to get more BitUSD out in the wild not to make money.

 
WHAT HAPPENS AT THE END OF THIS WORKER PROPOSAL
I think it needs to be 100 % crystal clear that these funds will be used for exactly what is prescribed and there is no temptation in the future for the committee-trade account to change the debt amounts agreed on or be tempted to spend on something else. These debts should remain on the committee-trade account permanently unless the community votes to change this in the future.


OTHER POINTS
- The committee account already contains 1.5 million BTS which could be used to give this liquidity proposal a head start. 
- I think either BitUSD or BitCNY should be chosen for this liquidity proposal but not both. We have very little money and need to focus on a single one to prove it works.
- I can't see any negatives to trying this proposal apart from a rogue committee. Please let me know if you can see any other big negatives.
- When you hear people say 97% of money in existence is debt it is true. But remember it was the 3% of debt free money that kick started the creation of the other 97%. So we do need a good supply of debt free bitUSD to get the money creation process started.

[yvv]

personally I do not like this idea, business should be done by businessmen.
who need bitUSD? tell me, I'll sell to him with close to market price.

The goal is to create a tighter market spread plus walls so that users can trade thousand BitUSD against USD and BitUSD against BTS.

%5

Centralized exchanges use their reserves for this purpose. If we want to compete against them, we need to have our market making fund. Also, this is essential for your POS to work. If merchant can't cash out coupled of thousand $$ per day, no way they are going to accept any smart coins.

[Chris4210]

personally I do not like this idea, business should be done by businessmen.
who need bitUSD? tell me, I'll sell to him with close to market price.

The goal is to create a tighter market spread plus walls so that users can trade thousand BitUSD against USD and BitUSD against BTS.

[yvv]

personally I do not like this idea, business should be done by businessmen.
who need bitUSD? tell me, I'll sell to him with close to market price.

Any businessman needs funds to do business. There are $4M worth of BTS sitting in reserve which could be used to boost liquidity for bitshares good. How many bitUSD do you have for sale? Is it enough to provide reasonable liquidity? Then why don't you put your offer on DEX?

[yvv]

What percentage of pool funds would be used? We must set a limit, the pool isn't infinite plus we need reserve for possible worker proposals that we might have in the future.

Start with small amount first. 100K BTS per day seems reasonable amount. These funds will not be lost (unless black swan happens). When worker is expired or voted out, he will need to settle debt at market price and send BTS back to reserve (whatever is left).

This is just one of possible ways to fund a market making pool. The other evident way would be to crowdfund the MM pool through UIA. Which way do we choose?

[Akado]

What percentage of pool funds would be used? We must set a limit, the pool isn't infinite plus we need reserve for possible worker proposals that we might have in the future.

[bitcrab]

personally I do not like this idea, business should be done by businessmen.
who need bitUSD? tell me, I'll sell to him with close to market price.

[Chris4210]

Totally support the idea of actively managing the reserve funds to increase bitAsset liquidity. Here is financial model which could work:

1. Create a worker which receives 100K BTS per day (or whatever voters decide).
2. The worker uses available funds to issue bitUSD and build a sell wall at call price up to 1K bitUSD. If the wall drops below 1K, issue more bitUSD to raise it back.
3. Use available funds to build a buy wall at feed price up to 1K bitUSD. If the wall drops below 1K, settle debt and raise it back.
4. Adjust bid/ask orders to match the current feed/call price hourly.
5. Adjust collateral ratio to safe level hourly.
6. Send unspent funds (if any) back to reserve every week.

If this works:
I Raise the walls to 10K bitUSD.
II Apply this scheme to other bitAssets.

Comments? Can this be automated?

That is a good roadmap to add liquidity. I create a google spreadsheet model for that, including the worker script and current price feeds.
https://docs.google.com/spreadsheets/d/1Zj7b0OCBBx_WYeDJWGdot3454UOTb5zJfZp2ulROfxQ/edit?usp=sharing

When we want to use: committee-trade
then we need to talk to:
Active
- bhuz   
- bitcube
- abit
- dele-puppy
- xeroc

@Bhuz @bitcube @abit @dele-puppy @xeroc

They are in charge of the account and should be able to set up a script as described by yvv.  I would suggest we start with USD and CNY first and test 90-150 days how the program works. It takes around 55 days to set up the 10k wall. It will take probably longer since more and more people will buy BitUSD.

The account can reuse the BTS he receives to create more BitAssets and sells them off.

What are the challenges?
- What if the BTS drops rapidly?
- At what price offset should be the sell wall?
- What happens if somebody buys up the complete wall? What comes next?
- How do we manage the debts of committee-trade once the worker is over?

[天籁]

Totally support the idea of actively managing the reserve funds to increase bitAsset liquidity. Here is financial model which could work:

1. Create a worker which receives 100K BTS per day (or whatever voters decide).
2. The worker uses available funds to issue bitUSD and build a sell wall at call price up to 1K bitUSD. If the wall drops below 1K, issue more bitUSD to raise it back.
3. Use available funds to build a buy wall at feed price up to 1K bitUSD. If the wall drops below 1K, settle debt and raise it back.
4. Adjust bid/ask orders to match the current feed/call price hourly.
5. Adjust collateral ratio to safe level hourly.
6. Send unspent funds (if any) back to reserve every week.

If this works:
I Raise the walls to 10K bitUSD.
II Apply this scheme to other bitAssets.

Comments? Can this be automated?

support！

[yvv]

Totally support the idea of actively managing the reserve funds to increase bitAsset liquidity. Here is financial model which could work:

1. Create a worker which receives 100K BTS per day (or whatever voters decide).
2. The worker uses available funds to issue bitUSD and build a sell wall at call price up to 1K bitUSD. If the wall drops below 1K, issue more bitUSD to raise it back.
3. Use available funds to build a buy wall at feed price up to 1K bitUSD. If the wall drops below 1K, settle debt and raise it back.
4. Adjust bid/ask orders to match the current feed/call price hourly.
5. Adjust collateral ratio to safe level hourly.
6. Send unspent funds (if any) back to reserve every week.

If this works:
I Raise the walls to 10K bitUSD.
II Apply this scheme to other bitAssets.

Comments? Can this be automated?

[JonnyB]

my bad. got a decimal place wrong. So it would have to be 1 million BTS a week which is almost half the dilution budget!

The committee account would have to keep recreating the BitUSD whenever it got force settled so I'm not sure it can be done as a one off thing.

[paliboy]

100,000 bts x 0.5 cent = $5000 with a collateral ratio of 2.5  would create $2000 bitUSD ( plus when sold by the committee for BTS it would create an additional 40,000 bts which could be either added to the collateral or used to create even more bitUSD)

Now I understand where the bug is

100,000 bts x 0.5 cent = $500 with a collateral ratio of 2.5  would create $200 bitUSD

Obviously it makes no sense to sell bitusd below the feed price as anyone could buy them up and then force settle them for a profit as I have done in the past.

 

Theres plenty of willing buyers for bitUSD but nobody wants to buy with huge mark ups.

I wish you were right. At the moment there are bids for 145 bitUSD at prices +-2% of feed price and 31 bitUSD at prices +-1% of feed price.

IMHO it would be much safer to do it as a one-time event at the beginning.

[JonnyB]

Steem backed dollars at 0.85 usd on external exchanges but not internally on the steem blockchain.
Might be because when you sell you SBD for Steem you have to wait a week to get them. Steem prices are very volatile and could crash a lot in one week.

nope. you can sell instantly. there's a median feature that takes 7 days until you get the median exchange steem, but that's another story

I guess people are taking a 15% hit to get their money out sooner then. But you can settle your SBD for $1 worth of steem with 7 days notice.

[fav]

Steem backed dollars at 0.85 usd on external exchanges but not internally on the steem blockchain.
Might be because when you sell you SBD for Steem you have to wait a week to get them. Steem prices are very volatile and could crash a lot in one week.

nope. you can sell instantly. there's a median feature that takes 7 days until you get the median exchange steem, but that's another story

[JonnyB]

I would like to see a financial model for this idea so that we can crunch some numbers and see how such worker should be structured. Steem sure made some differnet exp with SBD, but right now one SBD is traded for .85 USD? What is that about?

What kind of financial model do you mean?
The comittee-account or comittee-trade worker just asks for 100k per week to create a bitusd supply from the BTS and sells it to anyone that wants it.

Steem backed dollars at 0.85 usd on external exchanges but not internally on the steem blockchain.
Might be because when you sell you SBD for Steem you have to wait a week to get them. Steem prices are very volatile and could crash a lot in one week.

[JonnyB]

• I don't understand how would be 2000 bitUSD created using 100k BTS... looking into market right now, you can create 170 bitUSD with 100k BTS (collateral ratio 3)
• What collateral ratio would you choose?
• You want to sell it to highest bidder... at this moment it would mean that some of these 2000 bitUSD would be sold for as low as 170 BTS (feed price 195.73)
• Who is going to buy these created bitUSD? There are bids for about 580 bitUSD around/above feed price

100,000 bts x 0.5 cent = $5000 with a collateral ratio of 2.5  would create $2000 bitUSD ( plus when sold by the committee for BTS it would create an additional 40,000 bts which could be either added to the collateral or used to create even more bitUSD)

Obviously it makes no sense to sell bitusd below the feed price as anyone could buy them up and then force settle them for a profit as I have done in the past.

Theres plenty of willing buyers for bitUSD but nobody wants to buy with huge mark ups.

[fav]

I would like to see a financial model for this idea so that we can crunch some numbers and see how such worker should be structured. Steem sure made some differnet exp with SBD, but right now one SBD is traded for .85 USD? What is that about?

that's due to the "sudden" price drop, the median price is much higher than the real price. the peg is catching up

[paliboy]

Note that STEEM's payout in STEEMUSD can only be withdrawn slowly in 2 years.

That's not true, you can convert SteemUSD to Steem immediately, SteemPOWER can be withdrawn slowly in 2 years

[btswildpig]

Note that STEEM's payout in STEEMUSD can only be withdrawn slowly in 2 years.

[Chris4210]

I would like to see a financial model for this idea so that we can crunch some numbers and see how such worker should be structured. Steem sure made some differnet exp with SBD, but right now one SBD is traded for .85 USD? What is that about?

[paliboy]

• I don't understand how would be 2000 bitUSD created using 100k BTS... looking into market right now, you can create 170 bitUSD with 100k BTS (collateral ratio 3)
• What collateral ratio would you choose?
• You want to sell it to highest bidder... at this moment it would mean that some of these 2000 bitUSD would be sold for as low as 170 BTS (feed price 195.73)
• Who is going to buy these created bitUSD? There are bids for about 580 bitUSD around/above feed price

[fav]

nothing to lose, a lot to win. I'm in favor of it - give it a try

[JonnyB]

After almost a year it's clear to me that the current system where speculators are expected to short BitUSD into existence will not create the large supply of BitUSD  needed to make bitshares successful.

All bitassets have this same issue but we should on concentrate BitUSD or maybe BitCNY first.

We can learn from Steem backed dollars (SBD) which are backed by even more collateral than BitUSD but are created in an autonomous way by the system and not by traders.

I believe Bitshares needs an autonomous solution for creating a supply of BitUSD so that it is always available to buy and without a huge markup against USD.
This would require a hard fork and community consensus.

The easier option is to get the committee to create a worker proposal where all the received funds are used to create BitUSD and sell it to anyone who wants it.

I propose the committee make a worker proposal called (BitUSD liquidity) for 100k BTS per week which is used solely to create $2000 bitUSD every week.
This will all be sold to the highest bidder each week.

It is important to note that even though the committee will receiving 100k BTS each week for creating BitUSD there will not be an increase in the overall supply of BTS available to the public. Also the increase in supply of BITUSD will be 100% offset with the BTS used to buy it. This means dilution is not an issue at all unless the committee goes rogue and attempts to spend these funds on anything other than the creation of bitUSD.

This isn't the first time this idea has been suggested but I think now is the time to try it and if the community doesn't like it they don't have to support this worker proposal but I would like to see the committee propose it so it can be voted on.