Author Topic: Proposal Idea for Bitshares - Use SmartCoins instead of User Assets for Altcoins  (Read 14162 times)

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Offline Stan

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Anything said on these forums does not constitute an intent to create a legal obligation or contract of any kind.   These are merely my opinions which I reserve the right to change at any time.

Offline severo

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I'd like to critique the centralization of this "gateway / UIA" model with BTS. OL is very separate and distinct from BitShares itself, and this needs to be made clear to BTS investors. We, as a whole, are becoming far too reliant on OL / Obits and some of the other upcoming gateways being "layered" on the DEX. Without some marketing changes by BTS positioning these are distinct from BTS, if one of these "gateway exchanges" were to collapse, the BTS reputation would be irrevocably damaged.
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There is already a "BTC" tab in the Dex using BitBTC, so clearly I'm not the only one thinking this.  Let's ask Gateways to also support BitBTC (and perhaps BitETH) as a "base" pair (tab on UI) instead of UIAs, in addition to the Core BTS Dex, which already does this.


Totally agree. Bitshares should be as fully P2P as possible. Waves uses IOUs, which maintain third party risk. With SmartCoins the user gains in security, by eliminating the risk of third parties, the gateway wins by offering a better and safer product than the competition and Bitshares gains in liquidity. If this idea is not supported, we are crazy.

Offline renkcub

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Use SmartCoins instead of User Assets for Altcoins

This would be good for users, but this would create more pita for gateways. SmartCoins are more complex to issue/manage than UIA. Transwiser used SmartCoins model successfully though, may be openledger could follow? Or even better, how about p2p smartcoin gateway?

True, it does present a new set of challenges, foremost being the added collateral requirements (but, the upshot here is this significantly increases demand for BTS - further securing the network. Higher BTS price = more smartcoins possible.

Love that idea of a P2P smartcoin gateway.  +5%

Offline yvv

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Use SmartCoins instead of User Assets for Altcoins

This would be good for users, but this would create more pita for gateways. SmartCoins are more complex to issue/manage than UIA. Transwiser used SmartCoins model successfully though, may be openledger could follow? Or even better, how about p2p smartcoin gateway?

« Last Edit: October 06, 2017, 06:19:56 pm by yvv »

Offline renkcub

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Proposal Idea for Bitshares - Use SmartCoins instead of User Assets for Altcoins

TLDR:


Let's officially encourage moving volume from centralized Bitshares gateway exchanges (OpenLedger) to the Bitshares Asset Exchange itself, expanding on the successful model of BitBTC.

Background:


I've followed BTS since early PTS days and met Dan in 2013. I was instantly hooked. Even so, I had some concerns, especially about dishonest "DACs" and left the community before BTS was launched (https://bitsharestalk.org/index.php/topic,5407.msg72497.html#msg72497).

These concerns were well founded, as many "DACs" (now better known as DAOs), ICOs, or any centralized what-have-you, have eventually fallen prey to problems, whether it be hacks, mismanagement, exit scamming, or just honest error.

While, I am very impressed and thankful about what Ronny / OL have brought to the reputation of BTS and the DEX, I'd like to critique the centralization of this "gateway / UIA" model with BTS. OL is very separate and distinct from BitShares itself, and this needs to be made clear to BTS investors. We, as a whole, are becoming far too reliant on OL / Obits and some of the other upcoming gateways being "layered" on the DEX. Without some marketing changes by BTS positioning these are distinct from BTS, if one of these "gateway exchanges" were to collapse, the BTS reputation would be irrevocably damaged. When I hear "EOS is coming to BTS", I want it to actually be BTS, not OL.

As a reminder, your User-Issued coins are not yours on any BTS "Gateway". See MintPal, Crypsy, MtGOX. If OL fails to send you your "OPEN.BTC", for whatever reason, they're gone (although your BitBTC SmartCoins accessed via OL are perfectly safe). I have also witnessed some concerning service issues with OL (similar to Polo/Trex), and can't recommend OBITS as an investment in their current state. Although the attempts at transparency at admirable, they have quite a long way to go. The monthly "excel sheet' is poor (for true transparency, I suggest development of an OBITS "explorer" with tables for all fees generated by OPEN UIA, as well as signed addresses (similar to cryptofresh) so buybacks could be easily tracked in advance and crypto balance sheet assets verified).

My Suggestions:

BTS should build upon the successful example of BitBTC, and 1) immediately allow issuance of SmartCoins for major alts (BitLTC, BitETH, BitZEC) that are large and liquid enough to not be as prone to market manipulation. 2) Encourage liquidity on SmartCoins through implementation of a Maker Taker model, in which limit orders are free or receive credit back. 3. Less Important - Fund an official "bot" for users to run and add liquidity to the Dex (see BTSBOTS))

There is already a "BTC" tab in the Dex using BitBTC, so clearly I'm not the only one thinking this.  Let's ask Gateways to also support BitBTC (and perhaps BitETH) as a "base" pair (tab on UI) instead of UIAs, in addition to the Core BTS Dex, which already does this.

What are the key benefits of this switch? With SmartCoins instead of UIA, there is NO "black swan" exchange risk, so users funds will be safer (key thing here), trading fees lower, and new business opportunities arise for "Gateways"  to compete with each other to offer crypto (or fiat) in-out service for a fee in case users want to "Send" their BitAlt to an on-chain address instantly, rather than unwinding the asset back to BTS and moving value in that way (now, to send alts from BTS instantly, you'd only have to trust these "gateways" for a one-time transfer, instead of storing coins there as long as you keep them on BTS, whether for storage or active exchange).

The criticisms I've heard of the Altcoin = SmartCoin approach have centered around the volatility of altcoins not being appropriate for SmartCoins. While there is some truth to this (see "market-manipulation" on https://bitshares.org/technology/price-stable-cryptocurrencies.), I'm not buying it. Despite the recent "pump and dump" nature of BTS itself lately, BTS has served well as collateral for our existing SmartCoins. BitBTC has existed as a "crypto smart coin" for a long time with no issue. Besides, the genius collateral design of SmartCoins makes volatility of the asset a total non-issue, although there is a risk for cascading margin calls as things currently exist that should be discussed further (Check out the Gdax flash crash).

To sum thing sup, the most stable assets volume on the dex should all be using SmartCoins. This is NOT a critique of OL, just of the centralized exchange model. Still a huge place for centralized gateways/exchanges on BTS, such as for assets not large enough to justify a SmartCoin, and other new services.

What now? Let's start by beefing up liquidity on BitBTC / BTS and creating BitLTC, BitETH, and BitZEC / BitBTC markets.