Author Topic: Is it a good idea to lower MSSR of bitCNY from 1.1 to 1.05 or even lower?  (Read 3677 times)

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Offline pc

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MSSR is an important parameter here, it determine the gap between margin call price and the margin call order sell price, and will impact the behavior of different roles.

the higher the MSSR, the bigger the gap, the easier the margin call order will be eaten, but at the same time, the higher profit of shorting and the bigger the shorting incentive.

the lower the MSSR, the smaller the gap, more difficult the margin call order will be eaten, however at the same time, the lower the profit of shorting and the smaller the shorting incentive.

I'm glad to see that we agree about the mechanisms.

margin call is not bad or good, it will always happen, no use to blame bitCNY shorters who prefer being margin called, they have their risk and they provide liquidity.

I agree that the margin call as such is neither good nor bad. It is, however, an indication of a bad (read: dangerous) situation, i. e. short positions without sufficient collateral, which increases the likelyhood of a black swan.

The health of the system depends on shorters providing sufficient collateral. In bitCNY, shorters don't do that. They prefer being margin called. They even deliberately try to keep the collateral as low as possible, perhaps because only the least collateralized positions can profit from the 5% settlement offset.

IMO this is an indication of a very unhealthy situation. The settlement offset is an incentive for shorters to keep their collateral as low as possible, and the current MSSR isn't sufficient incentive for providing enough collateral. Your suggestion increases the likelyhood of a black swan, as you correctly pointed out above.
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Offline bitcrab

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I agree that the margin call as such is neither good nor bad. It is, however, an indication of a bad (read: dangerous) situation, i. e. short positions without sufficient collateral, which increases the likelyhood of a black swan.

The health of the system depends on shorters providing sufficient collateral. In bitCNY, shorters don't do that. They prefer being margin called. They even deliberately try to keep the collateral as low as possible, perhaps because only the least collateralized positions can profit from the 5% settlement offset.

IMO this is an indication of a very unhealthy situation. The settlement offset is an incentive for shorters to keep their collateral as low as possible, and the current MSSR isn't sufficient incentive for providing enough collateral. Your suggestion increases the likelyhood of a black swan, as you correctly pointed out above.

the "just 1.75" debt position is not relevant to 5% force settlement, as the latter seldom happen and are always in very little quantity.

they have their own logic, the logic is that "to be margin called as early as possible", this is one kind of policy of "stop loss", this logic does not always works well, some time they lose because of this.

anyway, they do not do harm to the system, actually they provide more liquidity. so just let them play like this if they like. in bitUSD market there is no such players, do you think bitUSD market more healthy than bitCNY market?

it's hard or impossible to tell what collateral is enough, when the market price is 1.05CNY do you think it enough to set the margin call price = 0.67?

maybe it's safe enough to set call price=0.2, but what sense does this make?

increasing MSSR really increase the likelihood of black swan, however at the same time it lower the shorting incentive, we need a balance here. for bitCNY thanks to the help of target CR and good market depth, I feel bitCNY has very very little chance to reach black swan even with MSSR = 1.05. I hope we can try this after sufficient discussion.
 

 
« Last Edit: August 16, 2018, 03:58:16 pm by bitcrab »

Offline xeroc

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.... perhaps because only the least collateralized positions can profit from the 5% settlement offset.

IMO this is an indication of a very unhealthy situation. The settlement offset is an incentive for shorters to keep their collateral as low as possible, and the current MSSR isn't sufficient incentive for providing enough collateral. Your suggestion increases the likelyhood of a black swan, as you correctly pointed out above.

So you are saying that the premium in bitCNY could well be the result of unaligned incentives with respect to MSSR and settlement offset.
Good call, need to think about this...

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Offline pluswave

So now magicwallet.witness is voted out as a backup witness, we can see that many stakeholders or big proxy are against this operation but not discussed here.

we just changed back to MSR of CNY to 1.1 and wait for broader consensus.
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Offline gghi

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        目前的问题就是bitcny的需求没有有效的传递到喂价,我们的喂价仅仅采集了交易所的价格而已,不是交易所控制了喂价,而是我们没有根据bitcny的需求及时确定合理的喂价。喂价应该是反映出合理的BTS的价格,然而目前的喂价明显很低。


      The problem is that the demand for bitcny is not effectively transmitted to the feed price. Our feed price only collects the price of the exchange. It is not that the exchange controls the feed price, but that we do not determine the reasonable feed price according to the demand of bitcny in time. The price should reflect the reasonable price of BTS, but the current price is obviously low.

Offline Yao

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margin call is not bad or good, it will always happen, no use to blame bitCNY shorters who prefer being margin called, they have their risk and they provide liquidity.

I agree that the margin call as such is neither good nor bad. It is, however, an indication of a bad (read: dangerous) situation, i. e. short positions without sufficient collateral, which increases the likelyhood of a black swan.

The health of the system depends on shorters providing sufficient collateral. In bitCNY, shorters don't do that. They prefer being margin called. They even deliberately try to keep the collateral as low as possible ......


In the past year or so, if you take REAL MONEY to participate in the BTS:bitCNY market, you will find that this is the real market, isn't it? This is the result of full competition in the market under the existing mechanism of SmartCoins. Each participant is a real sample, each market participant truly shows their intentions in the market. The market is chasing interests, as long as they are profitable, they will make the actions that they think are most beneficial. The market is not as static as it was written in the white paper.

I have been a participant in the BTS:bitCNY market since 2016 and are also a bitCNY shorter. From the bear market to the bull market (2014~2017), and then from the bull market to the bear market (2017 to the present), I used REAL MONEY to participate, trade and short.

In the past year or so, the Chinese community has been committed to increasing the supply of bitCNY, so that it can be widely used as the exchange's withdrawal and deposit method like USDT.

Over the past year, on the battlefield of bitCNY, we took REAL MONEY enters the market, and the SmartCoins (bitCNY) mechanism is tested adequately by the market (BTS:bitCNY). We have discovered and summarized some market laws, so we have the proposal to try to change the parameters and test it by action. I admit that it is reckless to take action without consulting the non-Chinese community. So witness.yao changed MSSR back to 1.1 and waiting for consensus.
« Last Edit: August 17, 2018, 10:33:10 am by Yao »
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Offline bitcrab

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BSIP drafted: https://github.com/bitshares/bsips/issues/97

I suggest big proxies who unvoted the witnesses that has already changed MSSR now revote them, witnesses who plan to change MSSR now stop and wait, let's discuss sufficiently under peaceful atmosphere to reach consensus first.

Offline xeroc

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BSIP drafted: https://github.com/bitshares/bsips/issues/97

I suggest big proxies who unvoted the witnesses that has already changed MSSR now revote them, witnesses who plan to change MSSR now stop and wait, let's discuss sufficiently under peaceful atmosphere to reach consensus first.
Thank you VERY much. I believe this is the right way to go and address all pros and cons.

I would also like to thank everybody in here for participating and providing valuable inside that hopefully leads to resolving that issue to the better of the entire community.

I'll revote as soon as i get to a desk, acknowledging the fact the communities are starting to work together.

Thank you!!
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Offline fav

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BSIP drafted: https://github.com/bitshares/bsips/issues/97

I suggest big proxies who unvoted the witnesses that has already changed MSSR now revote them, witnesses who plan to change MSSR now stop and wait, let's discuss sufficiently under peaceful atmosphere to reach consensus first.

thanks!
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Offline zhouxiaobao

This suggestion is very good!