Author Topic: The Hero from BitShares Island  (Read 7598 times)

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Offline Thom

Re: The Hero from BitShares Island
« Reply #60 on: May 17, 2017, 09:51:50 pm »
Not skilled in trading and I am interested in collateralizing HERO's but I am confused.  I thought the HERO was a stable FPA which would be valued based on the 1913 US$ with 5% APR.  Value would continue to just increase based on formula.  Now I see that there is a buy/sell wall and values change with demand.  Does not make it stable at all.  Can someone please enlighten me.

This asset is less than 24 hours old. I can understand why you might be confused. This is a "BitAsset" which is pegged to the value of the USD feed + 5%

The "interest" will not be paid by the BitShares reserver pool but rather by speculation initially and after awhile shorters in the market will provide a revenue stream. You can read about the theory in this steemit article here and here.
« Last Edit: May 17, 2017, 09:55:04 pm by Thom »
Injustice anywhere is a threat to justice everywhere - MLK |  Verbaltech2 Witness Reports: https://bitsharestalk.org/index.php/topic,23902.0.html

Offline biophil

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Re: The Hero from BitShares Island
« Reply #61 on: May 17, 2017, 11:27:27 pm »
Not skilled in trading and I am interested in collateralizing HERO's but I am confused.  I thought the HERO was a stable FPA which would be valued based on the 1913 US$ with 5% APR.  Value would continue to just increase based on formula.  Now I see that there is a buy/sell wall and values change with demand.  Does not make it stable at all.  Can someone please enlighten me.

"Stable FPA" means only that it has a well-defined price floor, and in this case, that price floor is equal to the 1913 USD +5% annually.

However, the price floor only means that it can be redeemed for BTS at that price at any time; people are free to trade it at whatever price they want. In this case, because it's designed to increase in value, I expect that it's likely to be traded consistently above the price floor. I explain my rationale for this in one of the Steemit articles that Thom linked to.
Support our research efforts to improve BitAsset price-pegging! Vote for worker 1.14.204 "201907-uccs-research-project."

Offline JamesK56

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Re: The Hero from BitShares Island
« Reply #62 on: May 17, 2017, 11:43:40 pm »
So if I was to collateralize it with my BTS I should be getting floor price and not trading price. What is the method to exchange collateral for Hero's other than the trading site

Offline biophil

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Re: The Hero from BitShares Island
« Reply #63 on: May 18, 2017, 03:03:45 am »
So if I was to collateralize it with my BTS I should be getting floor price and not trading price. What is the method to exchange collateral for Hero's other than the trading site

No matter what you do with a smartcoin you'll be interacting with the open market. Either you're borrowing to short sell (I assume what you mean by collateralize), or you're buying outright because you want to collect the 5% gains.

You get the floor price if you own a HERO and you request settlement, which you'd do if the price we're consistently well below the floor price.
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Offline fav

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Re: The Hero from BitShares Island
« Reply #64 on: May 22, 2017, 08:14:27 pm »
HERO trading on OpenLedger works now
► How-to Buy BitShares: https://goo.gl/i9j2YZ

Offline brendio

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Re: The Hero from BitShares Island
« Reply #65 on: July 15, 2019, 09:26:38 am »
I have the feeds set up for when this thing kicks off.

I see you stopped producing feeds a couple of weeks ago. I'm not sure whether this corresponded with you falling out of the active witnesses list. In any case, it has meant that there are no longer enough valid feeds to produce a price for the HERO asset.

So, sorry to necro-bump, but is HERO dead?

Here's my prediction:

Crypto markets are currently overheated, which means that a significant correction will happen sooner or later. At that point, most BitAssets, including HERO, will be undercollateralized and suffer a black swan. Everybody loses.
So you are predicting that the bts price will drop so fast as to trigger a chain of margin calls in the short positions of SmartCoins will not be able to sell their assets to repay their debt to the BitShares blockchain?

If you were a very large short position on SmartCoins right now, would you be settling the debt ASAP and holding in bts?

I have noticed the total Market Cap of SmartCoins has dropped by over 50% since yesterday:
https://bitsharestalk.org/index.php/topic,24159.0.html
This prediction turned out pretty spot on, in retrospect.