Author Topic: poll for bitUSD parameter optimization  (Read 4382 times)

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Offline bitcrab

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poll for bitUSD parameter optimization
« on: July 29, 2016, 03:21:21 pm »
smartcoin economy and current bitCNY status

smartcoin is not only stable currency, but also financial leverage tool.

shorters use this leverage tool to fulfill financial needs by borrowing smartcoins from system, for bitCNY, the 1% force settlement offset and 0.5% force settle volume limit greatly reduce the shorters' worry of being force settled, even their debt position are force settled, they always have big chance to buy back BTS from market without loss. in summary, this setting make the user experience of the leverage tool much better than before, that is why bitCNY supply doubled in 5 weeks. 

then is bitCNY devalued by 1%? things are not simple, now bitCNY express its value by trading, or by withdrawing to fiat CNY, in both ways it is not devalued, however in both ways transwiser play an important role. this lead to another question - does bitCNY's value depend on transwiser's service?

in my opinion in smartcoin economy gateways and market makers are must and play important role, they help exact pegging and provide liquidity, however, this is not to say that the smartcoins' value depend on their service, we can also say it's smartcoins' own value make the gateway and market making service possible.

force settlement should not be seen as a common value express, it is "last resort", I don't think we can expect merchants to accept smartcoins just because of the 100% force settlement, a gateway service is always needed for merchants to accept smartcoins.

bitCNY now has a supply of 1.57M, in my view the supply may reach 5M at the end of this year, frankly speaking, as a gateway transwiser now face bigger chanllenge than before, now most bitCNY finally come to transwiser as an exit but seldom people buy bitCNY from transwiser, to balance the liquidity flow, transwiser need to try to make bitCNY trading base for more markets in DEX, and also need to try to build something like CNY-USD exchange channel with the help of bitCNY,bitUSD/USDT.

bitUSD's current status and change proposal

generally speaking, bitUSD is now in low supply(about 115k), low trading volume and bad pegging(bitUSD always worth 5~10% higher than fiat USD)

I am not sure why things are like this, but in the past we do not have a good channel to do bitUSD/fiat USD conversion, now thanks to OpenLedger's work, we now have OPEN.USDT to play the role of bridging bitUSD and fiat USD, now any market maker can do more in bitUSD market to provide liquidity and help exact pegging, but at that stage the same problem that has puzzled bitCNY ecosystem will also appear here - how to encourage shorters to generate more bitUSD?

here I propose the same solution to bitUSD as had applied to bitCNY - change the force settlement offset to 1% and max hourly force settle volume to 0.5%, currently the two parameter values for bitUSD are 0% and 20%.

The force settlement offset can be seen as a service fee that holder pay to the settled shorter at the time of force settlement. The offset need to be a proper value that can balance the risk of holders and shorters. A 0 offset is not reasonable enough as in common financial logic the collateral should not be force settled without any compensation if the collateral price does not fall below the margin call price. On the other hand, if the offset is set too high, force settlement will be unfeasible as "last resort" for value express. another parameter -  the max hourly force settle volume -  should be low enough to prevent sudden settlement to force shorters out quickly. experience in bitCNY shows the 1% offset and 0.5% max hourly force settle volume are comparatively reasonable combination.

this poll is to collect opinions from community, next, similarly, BSIP and maybe also worker proposals will be created, and finally if there are enough support, a committee proposal will be created to implement the change.
« Last Edit: August 01, 2016, 09:30:27 am by bitcrab »
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Offline ripplexiaoshan

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Re: poll for bitUSD parameter optimization
« Reply #1 on: July 29, 2016, 04:19:24 pm »
support!
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Offline BunkerChainLabs-DataSecurityNode

Re: poll for bitUSD parameter optimization
« Reply #2 on: July 29, 2016, 04:46:46 pm »
I support this. However, I think I would prefer to see this simply become the standard across the board for all community run bitassets instead of spinning up the same process on every single one.

It appears to be clear that the economics and incentives are better aligned and it doesn't make a different from one bitasset to another.

This should be considered across the board.
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Offline Moon

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Re: poll for bitUSD parameter optimization
« Reply #3 on: July 30, 2016, 02:18:09 am »
i support  +5%

Offline bitcrab

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Re: poll for bitUSD parameter optimization
« Reply #4 on: July 30, 2016, 03:51:47 am »
I support this. However, I think I would prefer to see this simply become the standard across the board for all community run bitassets instead of spinning up the same process on every single one.

It appears to be clear that the economics and incentives are better aligned and it doesn't make a different from one bitasset to another.

This should be considered across the board.

at least I think in future we can apply the change to other smartcoins in groups, not one by one.
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Offline yvv

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Re: poll for bitUSD parameter optimization
« Reply #5 on: July 30, 2016, 10:21:46 am »
Apply it for all committee coins now. Change the poll title.

Offline pc

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Re: poll for bitUSD parameter optimization
« Reply #6 on: July 30, 2016, 03:05:52 pm »
I object. I'm currently holding ~4,500 BitUSD. I would be directly damaged from this proposal.

I have already stated that I perceive the modification of an explicit guarantee as robbery.

I will consider legal action against any committee members who vote for such a proposal. I will also consider legal action against any shareholders who vote for such committee members.
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Offline bitcrab

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Re: poll for bitUSD parameter optimization
« Reply #7 on: July 30, 2016, 04:00:32 pm »
I object. I'm currently holding ~4,500 BitUSD. I would be directly damaged from this proposal.

I have already stated that I perceive the modification of an explicit guarantee as robbery.

I will consider legal action against any committee members who vote for such a proposal. I will also consider legal action against any shareholders who vote for such committee members.

interesting.

to avoid the "damage", you can force settle before the change apply.

or if you like, transwiser can pay you 4500 OPEN.USDT to buy the 4500 bitUSD.

I don't think you are guaranteed more.

in BSIP#16 there is an answer to this question that can be referenced: https://github.com/bitshares/bsips/blob/master/bsip-0016.md

Does this proposal break a promise?

Yes, but maybe not! There were promises made that bitassets can be settled at any time at the fair price (price feed). With this proposal, we ask for a percentage fee for the settlement service. This can be interpreted as breaking a promise while it could also be interpreted as a change in fee schedule: "Settlements are free for the first few months, after that they are 1%".

most of the community now understand the necessity and importance of this change, someone even propose to apply the change to all the smartcoins, why resist such a beneficial improvement just because of your little "benefit"?

I cannot imagine that this change can be stopped by your threat.


« Last Edit: July 31, 2016, 12:58:21 am by bitcrab »
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Offline yvv

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Re: poll for bitUSD parameter optimization
« Reply #8 on: July 30, 2016, 05:27:44 pm »
I object. I'm currently holding ~4,500 BitUSD. I would be directly damaged from this proposal.

I have already stated that I perceive the modification of an explicit guarantee as robbery.

I will consider legal action against any committee members who vote for such a proposal. I will also consider legal action against any shareholders who vote for such committee members.

Yeah, right, good luck with that. There are no signatures of no committee members and no shareholders under no promises. Everybody is well informed that fee schedule and other terms may be changed by votes of shareholders. Calling this a robbery is really being an ass. You have several ways to cash out your bitUSD with no loss at any moment.

Offline bitsharesbrazil

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Re: poll for bitUSD parameter optimization
« Reply #9 on: July 31, 2016, 02:48:01 am »
yes for bitcrab.....

bitcrab think carefully about liquidity proposal those guys made at other topic....maybe give them an alternative....regards.
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Offline EstefanTT

Re: poll for bitUSD parameter optimization
« Reply #10 on: July 31, 2016, 09:50:18 pm »
Apply it for all committee coins now. Change the poll title.
This ^


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Offline Akado

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Re: poll for bitUSD parameter optimization
« Reply #11 on: August 01, 2016, 12:39:08 am »
I object. I'm currently holding ~4,500 BitUSD. I would be directly damaged from this proposal.

I have already stated that I perceive the modification of an explicit guarantee as robbery.

I will consider legal action against any committee members who vote for such a proposal. I will also consider legal action against any shareholders who vote for such committee members.

So now everyone start's doing that each time a parameter is changed. How can you even call BitShares decentralized after saying that.

Every paramater is subject to change, there are no guarantees. And to for that to happen committee who were previously elected with the most votes need to approve it.

I believe by using the technology you're already bound to this, the same way when you visit a website you automatically accept giving information on your cookies.

If bitcoin forks you're going to seek legal action against miners?

Plus, doing it on members who support those committee members? LOL. Even if there was any guarantee of something, which there isn't and every parameter is subject to change - which, by the way, is why they are called "parameters" -  what can be seen as a bad option to you might not be for others. Opinions are relative and you can't force yours on others. That's just stupid.

Even if it was something hardcoded, the community could always fork and change and you would have the option to have it your way on your chain. That doesn't mean the majority and liquidity will be on your side and you can't force ppl to do so.

Good luck.
« Last Edit: August 01, 2016, 12:48:51 am by Akado »
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Offline bitcrab

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Re: poll for bitUSD parameter optimization
« Reply #12 on: August 02, 2016, 06:58:27 am »
issue for BSIP created: https://github.com/bitshares/bsips/issues/14, [member=120]xeroc[/member] could you please check and convert to BSIP?
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Offline xeroc

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Re: poll for bitUSD parameter optimization
« Reply #13 on: August 02, 2016, 08:55:06 am »
IMHO we should postpone this for quite a bit ..
The CNY modifications are only active for a few weeks and I don't feel the need to modify bitUSD just now.
I'd like to see CNY become more prominent across the whole crypto space .. Only after that happend and people won't use bitUSD because of the 1% difference in settlement, then I think we can start discussing this again.
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Offline llildur

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Re: poll for bitUSD parameter optimization
« Reply #14 on: August 02, 2016, 09:08:36 am »
IMHO we should postpone this for quite a bit ..
The CNY modifications are only active for a few weeks and I don't feel the need to modify bitUSD just now.
I'd like to see CNY become more prominent across the whole crypto space .. Only after that happend and people won't use bitUSD because of the 1% difference in settlement, then I think we can start discussing this again.

 +5% +5%

Offline bitcrab

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Re: poll for bitUSD parameter optimization
« Reply #15 on: August 02, 2016, 03:10:44 pm »
IMHO we should postpone this for quite a bit ..
The CNY modifications are only active for a few weeks and I don't feel the need to modify bitUSD just now.
I'd like to see CNY become more prominent across the whole crypto space .. Only after that happend and people won't use bitUSD because of the 1% difference in settlement, then I think we can start discussing this again.

I don't think we need to wait for more time.
we are cautious enough, but effectiveness is also important,  some competitors such as MAKER will come in not long future,  we need to make bitshares smartcoins as prominent as possible.
this is not a dangerous change, even in the worst condition we can easily restore the parameters to old values.
bitCNY and bitUSD can become prominent together, no need to make this process delay, even more, we need to consider to do the change to EUR, JPY, GBP, CAD...etc. in recent future.
we should respect the opinion from the community reflected in this poll.
 
« Last Edit: August 02, 2016, 04:38:16 pm by bitcrab »
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Offline Chronos

Re: poll for bitUSD parameter optimization
« Reply #16 on: August 02, 2016, 04:11:02 pm »
I support this change. Thank you [member=23]bitcrab[/member] for your methodical and consistent handling of these proposals.

Offline Chris4210

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Re: poll for bitUSD parameter optimization
« Reply #17 on: August 02, 2016, 07:10:57 pm »
I think we had some really good arguments from both sides in this discussions already. The last time many concerns have been brought up regarding the promise of "at least 100%" back.

I would like to wait a bit longer with a market change with BitUSD too. I expect a different market situation once BlockPay started. We will have a huge liquidity inflow with hundreds of merchants who want to sell their BitAssets again. This will create a full new dynamic for our markets when people want to sell 30k BitUSD on the DEX every day.

What are your thoughts about that?
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Offline bitcrab

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Re: poll for bitUSD parameter optimization
« Reply #18 on: August 03, 2016, 02:53:19 am »
I think we had some really good arguments from both sides in this discussions already. The last time many concerns have been brought up regarding the promise of "at least 100%" back.

I would like to wait a bit longer with a market change with BitUSD too. I expect a different market situation once BlockPay started. We will have a huge liquidity inflow with hundreds of merchants who want to sell their BitAssets again. This will create a full new dynamic for our markets when people want to sell 30k BitUSD on the DEX every day.

What are your thoughts about that?

if you expect 30k bitUSD daily trading volume, there should be at least about 300k bitUSD supply,but where are they?
now the bitUSD supply is only 120k, and inside which about 40k are generated by me.
the change will also help your business, right? we can let the two market change happen together, right?


« Last Edit: August 03, 2016, 07:42:01 am by bitcrab »
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Offline JonnyB

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Re: poll for bitUSD parameter optimization
« Reply #19 on: August 04, 2016, 06:14:50 am »
My issue with this proposal is that it is actually 2 separate proposals.

1.) change force settlement by 1%
2.)  reduce max hourly settle volume to 0.5%

Do not bundle them together as one proposal please.
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Offline bitcrab

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Re: poll for bitUSD parameter optimization
« Reply #20 on: August 04, 2016, 07:07:41 am »
My issue with this proposal is that it is actually 2 separate proposals.

1.) change force settlement by 1%
2.)  reduce max hourly settle volume to 0.5%

Do not bundle them together as one proposal please.

but we do the change in order to reduce the worry of shorters, and then improve the user experience of the leverage tool, so not only need to set some price offset, but also need to lower the 20% hourly max settlement volume to a reasonable value.

you do not like the 0.5%? you want to propose another value?
I strongly suggest that this time we just adjust the 2 parameters together, as 20% is too big as an hourly settlement limit, then if you believe some other value is better than 0.5%, we can issue another poll to collect the opinion and adjust accordingly.
« Last Edit: August 04, 2016, 08:45:15 am by bitcrab »
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Offline Chris4210

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Re: poll for bitUSD parameter optimization
« Reply #21 on: August 04, 2016, 04:38:51 pm »
What is the parameter actually doing?

2.)  reduce max hourly settle volume to 0.5%

So I can maximum settle a total volume of 0.5% per hour? When I want to settle 100 BitUSD, I can only settle 0.5 BitUSD in one hour? That would slow down any black swan event.

What is the reason for 20% right now? What does it protect?
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Offline paliboy

Re: poll for bitUSD parameter optimization
« Reply #22 on: August 05, 2016, 07:50:51 am »
What is the parameter actually doing?

2.)  reduce max hourly settle volume to 0.5%

So I can maximum settle a total volume of 0.5% per hour? When I want to settle 100 BitUSD, I can only settle 0.5 BitUSD in one hour? That would slow down any black swan event.

What is the reason for 20% right now? What does it protect?

If I understand it correctly, it's percet of whole supply of particular asset. Right now there are 127098 bitUSD in existence so with current rules you can settle 25419.6 bitUSD per hour, with new rules only 635.5 bitUSD per hour. Can anyone confirm?

Offline pc

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Re: poll for bitUSD parameter optimization
« Reply #23 on: August 05, 2016, 09:22:10 am »

If I understand it correctly, it's percet of whole supply of particular asset.
That's correct.
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Offline JonnyB

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Re: poll for bitUSD parameter optimization
« Reply #24 on: August 05, 2016, 10:40:53 am »
What is the parameter actually doing?

2.)  reduce max hourly settle volume to 0.5%

So I can maximum settle a total volume of 0.5% per hour? When I want to settle 100 BitUSD, I can only settle 0.5 BitUSD in one hour? That would slow down any black swan event.

What is the reason for 20% right now? What does it protect?

If I understand it correctly, it's percet of whole supply of particular asset. Right now there are 127098 bitUSD in existence so with current rules you can settle 25419.6 bitUSD per hour, with new rules only 635.5 bitUSD per hour. Can anyone confirm?

Is this 635.5 BitUSD per person/account or 635.5 BitUSD per hour in total for everyone?
If it is per account someone could distribute the BitUSD they want to settle across 20 accounts and settle $127098 in an hour.

Can someone confirm?
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Offline bitcrab

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Re: poll for bitUSD parameter optimization
« Reply #25 on: August 05, 2016, 11:30:20 am »
What is the parameter actually doing?

2.)  reduce max hourly settle volume to 0.5%

So I can maximum settle a total volume of 0.5% per hour? When I want to settle 100 BitUSD, I can only settle 0.5 BitUSD in one hour? That would slow down any black swan event.

What is the reason for 20% right now? What does it protect?

If I understand it correctly, it's percet of whole supply of particular asset. Right now there are 127098 bitUSD in existence so with current rules you can settle 25419.6 bitUSD per hour, with new rules only 635.5 bitUSD per hour. Can anyone confirm?

Is this 635.5 BitUSD per person/account or 635.5 BitUSD per hour in total for everyone?
If it is per account someone could distribute the BitUSD they want to settle across 20 accounts and settle $127098 in an hour.

Can someone confirm?
in total
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Offline JonnyB

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Re: poll for bitUSD parameter optimization
« Reply #26 on: August 05, 2016, 12:08:21 pm »
What is the parameter actually doing?

2.)  reduce max hourly settle volume to 0.5%

So I can maximum settle a total volume of 0.5% per hour? When I want to settle 100 BitUSD, I can only settle 0.5 BitUSD in one hour? That would slow down any black swan event.

What is the reason for 20% right now? What does it protect?

If I understand it correctly, it's percet of whole supply of particular asset. Right now there are 127098 bitUSD in existence so with current rules you can settle 25419.6 bitUSD per hour, with new rules only 635.5 bitUSD per hour. Can anyone confirm?

Is this 635.5 BitUSD per person/account or 635.5 BitUSD per hour in total for everyone?
If it is per account someone could distribute the BitUSD they want to settle across 20 accounts and settle $127098 in an hour.

Can someone confirm?
in total

So that would mean If someone settled $635.5 everyone else would be unable to settle their BitUSD for the next hour?
why 0.5% what is wrong with 20%?
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Offline yvv

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Re: poll for bitUSD parameter optimization
« Reply #27 on: August 05, 2016, 12:23:40 pm »
They want to limit the total volume of forced settlements, such that people don't settle all bitAssets in few hours when the market price goes below the feed price. Imo, this is not necessary. It is ok if market decides how much is forced settled.

In fact, limiting forced settlement volume defeats the purpose of forced settlement.
« Last Edit: August 05, 2016, 12:38:32 pm by yvv »

Offline paliboy

Re: poll for bitUSD parameter optimization
« Reply #28 on: August 05, 2016, 12:54:47 pm »
So that would mean If someone settled $635.5 everyone else would be unable to settle their BitUSD for the next hour?
why 0.5% what is wrong with 20%?

I see it as protection for shorters... in all other trading engines, you get margin called and you still have opportunity to increase your collateral.

Another point of view: daily trading volume of bitUSD in last 24 hours was 1900 USD, in this context 635 USD per hour isn't that low number. Still good topic for discussion whether it shouldn't be set to some different value.

Offline bitcrab

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Re: poll for bitUSD parameter optimization
« Reply #29 on: August 05, 2016, 01:32:38 pm »
So that would mean If someone settled $635.5 everyone else would be unable to settle their BitUSD for the next hour?
why 0.5% what is wrong with 20%?

I see it as protection for shorters... in all other trading engines, you get margin called and you still have opportunity to increase your collateral.

Another point of view: daily trading volume of bitUSD in last 24 hours was 1900 USD, in this context 635 USD per hour isn't that low number. Still good topic for discussion whether it shouldn't be set to some different value.
yes, the limit is to prevent the holders from doing sudden big volume force settlement and force the shorters out.
actually 0.5% is not so low,  when Argentina people ask me for smartcoin parameters, I suggest them to set a 2% limit, but that is based on misunderstanding, because at that time I think max settle limit is per day!
after bitCNY change, up to now we saw force settlement always finished in a couple of hours under the 0.5% setting.
we can discuss what value is better, but I really think 20% is too high.
maybe this setting is not so friendly to speculators, but in my view, to design a rule, first priority is considering how to make the ecosystem become prosperous healthily, but not speculators' user experience.
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Offline yvv

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Re: poll for bitUSD parameter optimization
« Reply #30 on: August 05, 2016, 02:42:39 pm »
BitAsset holders benefit from forced settlement only if the market price goes below the feed price, and the feed price does not drop in next 24 hours. This is imposes a natural limit on volume.

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Re: poll for bitUSD parameter optimization
« Reply #31 on: August 05, 2016, 04:24:45 pm »
BitAsset holders benefit from forced settlement only if the market price goes below the feed price, and the feed price does not drop in next 24 hours. This is imposes a natural limit on volume.

generally speaking, when the price goes to a very low level, the holders can benefit, because at this moment force settlement is a way to  buy big volume at very low price, considering the possibility of price manipulation, this is the very moment that the shorters need more protection.
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Offline yvv

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Re: poll for bitUSD parameter optimization
« Reply #32 on: August 05, 2016, 04:32:38 pm »
BitAsset holders benefit from forced settlement only if the market price goes below the feed price, and the feed price does not drop in next 24 hours. This is imposes a natural limit on volume.

generally speaking, when the price goes to a very low level, the holders can benefit, because at this moment force settlement is a way to  buy big volume at very low price, considering the possibility of price manipulation, this is the very moment that the shorters need more protection.

If the problem is actually not a settlement volume, but possibility of price manipulation, why not to address this problem directly?