New to BitShares

[Troglodactyl]

Settlement is based on the feed price at the time the settlement occurs, not the time it's requested.  This way no one can exploit momentary spikes and the settlement mechanism.  The ability to force settle is designed to create a price floor for the smartcoins.  If the pair has sufficient volume, spreads should be narrow enough that simply trading rather than force settling would be preferable.

[prozachj]

This means that the blockchain will pay the trader the price-feed value of the SmartCoin that he is re-selling.

Is the feed-price value for a settlement determined at the time you request the settlement or at the time of settlement?

[Permie]

Thank you for the clear explanations. I was definitely conflating smartcoins and UIAs. I think the fact that the markets tab in the BitShares UI doesn't separate them (there are UIA markets under the bitUSD tab etc) or meaningfully denote them may have contributed to that confusion.

I am correct that trading in smartcoin markets seems to incur less counter party risk than trying to trade the cryptocurrencies via UIAs?

Yes. Less risk. The only Smartcoin risk is the risk of a "Black Swan" event (an entirely unpredictable catastrophe)  and that the value of bts, the value of collateral backing all smartcoins, suddenly decreased in value by 75% or more within a very short period of time.
So quickly that the blockchain would not be able to margin-call all of the shorters in time.

Is being a short seller really required for smartcoin creation? Couldn't I just as easily lock up BitShares to go long say bitGold or bitOil?

No, Bitshares does not allow you to lock up collateral to go long.  Being 'long' bitUSD is merely purchasing bitUSD from the market and holding it

[prozachj]

Thank you for the clear explanations. I was definitely conflating smartcoins and UIAs. I think the fact that the markets tab in the BitShares UI doesn't separate them (there are UIA markets under the bitUSD tab etc) or meaningfully denote them may have contributed to that confusion.

I am correct that trading in smartcoin markets seems to incur less counter party risk than trying to trade the cryptocurrencies via UIAs?

Is being a short seller really required for smartcoin creation? Couldn't I just as easily lock up BitShares to go long say bitGold or bitOil?

I hope you become part of the community

I guess, technically I am part of the way there, just need to pull my BitShares out of my current exchange and put them into my wallet. 

[Permie]

http://cryptofresh.com/assets

All SmartCoins and UIAS are listed.
All of this data is scraped from the BitShares blockchain itself.
All data is transpartent and open-source.
There is no insider-trading, and High Frequency Trading bots have no more advantage than an individual trader.
Everyone receives data about the market at the same instant.

[Permie]

Welcome!
Thank you for introducing yourself. I hope you become part of the community

Now for a few questions (feel free to tell me to go bugger off and read the docs):

The DEX seems to eliminate counter party risk for trades, but it seems to me that most of the smartcoins being issued by a gateway mean that risk is reintroduced if I ever want to take value out of the platform (say to buy something). I understand that the contracts that back the coins don't rely on a counter party to peg the value, but what happens if the gateway runs off with the underlying peg coins? How would I then turn my OPEN.x or TRADE.X into X?

OPEN.X are what's known as 'UIA's or User Issued Assets.
These assets are backed/guarenteed by a third party. OPEN LEDGER who issue OPEN.X make every effort to "self insure" and protect the assets backing their tokens.
They use multi-sig wallets, employ staff and do whatever it takes to convince the market that they are solvent and secure.
It is up to the individual investor to decide if any UIA meets their demands for security.

A Smart Coin is an asset backed by the BitShares blockchain. SmartCoins come into existance as the result of a short-trader locking up collateral (in the form of bts) to the blockchain. In return, the blockchain lends the trader the corresponding amount of bitUSD/bitCNY/bitX....

The price feeds for SmartCoins (so that the blockchain knows how much to lend with the collateral provided) are provided by BitShares Witnesses.
Of all the prices quoted by Witnesses for bitUSD (for example) the median-average result is taken.
This is to prevent Witness manipulation. If the mean-average was taken, then a malicious Witness could publish a slightly-too-high price, and skew the result in his favour. This cannot happen with median-average.

What happens if the value of BitShares goes so low (or a specific coin so high) that there is no longer a way to satisfy the smart contract that keeps the peg?

Can someone give me the TLDR on witnesses?

Same for forced settlements?

The peg is not static.
The price feed given for SmartCoins is not binding. The price feed provides the forced settlement price.

SmartCoins can trade anywhere above the price feed, but are heavily incentivized not to trade below the price feed. If a SmartCoin is being offered for sale at the pricefeed minus 5%, then a rational trader will buy up the asset for that price, and then immediately 'force settle'.

This means that the blockchain will pay the trader the price-feed value of the SmartCoin that he is re-selling.
The blockchain funds this sale by closing the position of the lowest-collateralised short position on the SmartCoin in question.
Forced Settlement takes 24hrs to execute, but the force-settler will receive the full amount. 24hr time lag is to prevent manipulation and front-running.

Force-Settlement ensures that short-positions monitor and maintain the minimum level of collateral required by the blockchain to trade.
If the shorters get lazy and the market moves away from them, they risk the blockchain selling their collateral to repay their loan.

[prozachj]

Hey BitShares community! Discovered the platform recently while looking for ways to reduce counter-party risk in my crypto trading (not get goxed). The DEX is pretty exciting, but I also have to admit that consuming information and documentation about BitShares and becoming proficient with the platform and the technology behind it is going to take me some time. The community here seems really great (and surprisingly small given the apparent value I see in the DEX) so I thought I'd introduce myself.

I'm from Houston, Texas. I work in software security and came from the web development world before finding my talent for breaking things. In my spare time, I'm building a vegetable farm and trading crypto.

I'm prozachj in most places on the net and HClO4Burns in a few others in case you want to look me up.

Now for a few questions (feel free to tell me to go bugger off and read the docs):

The DEX seems to eliminate counter party risk for trades, but it seems to me that most of the smartcoins being issued by a gateway mean that risk is reintroduced if I ever want to take value out of the platform (say to buy something). I understand that the contracts that back the coins don't rely on a counter party to peg the value, but what happens if the gateway runs off with the underlying peg coins? How would I then turn my OPEN.x or TRADE.X into X?

What happens if the value of BitShares goes so low (or a specific coin so high) that there is no longer a way to satisfy the smart contract that keeps the peg?

Can someone give me the TLDR on witnesses?

Same for forced settlements?