suggestion for an committee controlled open market operation fund

[Crypto Kong]

Can we please get a report on results from this operation?

[abit]

As far as I can tell, bitUSD still lacks of supply and liquidity, major reasons are BBF (as escrow of workers) and bitSpark are demanding/hoarding significant amounts while not many people want to or can afford to create more supply.

bitCNY on the other hand is fine so far since there are much more creators, probably due to convenient on/off ramps.

[bitcrab]

below is the statistic of the trading of OMO fund up to today:


account                          trade type    BTS quantity    smartcoin quantity     average price
committee-cnytrader       buy             15581697.83   17901590.24              1.148 bitCNY
                                     sell              1605097.827   963195.7544              0.60 bitCNY

committee-usdoperator   buy              5968469.697   1059789.265              0.177 bitUSD

the sell come from margin call.

yes, OMO bought a lot BTS in obviously higher price comparing to today's BTS price, as most of the trading are done before 8th, Aug, at that time bitCNY is still in premium and it's not easy to predict that a big bear is coming to the market.

I believe either 1.148bitCNY or 0.177USD is not very high price for BTS, BTS will go above these prices in the future, and, more importantly, to provide liquidity of bitCNY and bitUSD, rather than making profit is the No.1 purpose of OMO.

we learnt a lot in the past several months, we saw that in the big bear market, OMO is not able to prevent BTS price from falling down rapidly, it is not able to prevent the speeding up margin call/price falling, however, after 719 hard fork and BSIP42 implementation, we saw that the rule change helps a lot to prevent the speeding up margin call/price falling in bear market.

rules here is much more important than fund, after 719 and BSIP42, the system itself can adjust the supply according to the demand, now OMO is not so necessary as we have imagined.

now another worker proposal that need a >100K BTS daily pay is under discussion, if finally it can be voted active I think it will be good for that worker proposal to replace the OMO proposal.

[xeroc]

Thank you for changing the tone of your posts.

[Thul3]

this is the initial logic design at the start time of OMO, now when check it again, seems it is a little too conservative.

the OMO has an advantage that other funds do not have, it has daily income of 200K BTS and also bitCNY&bitUSD market fees, so it is more powerful to resist risks - when risk appear, we can use the new coming BTS and smarcoins to increase the ratio.

now the cnytrader team do the trading based on some other logic, mainly on the margin call price and the "bottom price" in our mind, we now suppose the price of about 0.75CNY is the bottom price and it's safe enough to set the margin call price at this point.

yes, tomorrow we'll use the new coming funds to increase the ratio.

and, actually I hope committee members from USD world can take care the committee-usdoperator account and do the bitUSD trading tasks, no problem to remove me from the multisig of committee-usdoperator.

You are already planning future RP funds which i disagree.Many members already stated that this fund is already to big and leave peanuts for other WP .

You can't take future RP funds hostage

the funds is not big enough considering it's

obligation

. and this WP is helping to maintain the BTS price and thus maintain the value of the BTS balance in each WP.

any WP that need fund can try to attract voting to make itself above the OMO WP and get money.

Which obligation are you taking about ?

1. Charge market fee for smarcoins like bitCNY and bitUSD.

2.Use the collected fee to buy BTS. 

3. Borrow bitCNY/bitUSD by putting the bought BTS into collateral with high collateral ratio and continue to buy in BTS.



1.the purpose of the fund is to adjust the supply of smartcoins, so operators need to decide depend on the market condition, borrow smartcoins and buy BTS while the smartoin is in shortage, sell BTS and reduce debt position while the smartcoin is over supplied.

2. operators need to take good care while operate with debt positions, as an initial rough principle, when BTS price is under 2CNY:
while collateral ratio > 4, borrowing more smartcoin is allowed.
while 4>collateral ratio>3, smartcoin income can be used to buy more BTS, but borrowing more smartcoin is not allowed.
while 3>collateral ratio, smartcoin income need to be used to reduce debt position, buying more BTS is not allowed.

3.when more than 10M BTS are accumulated in one operator account, the account need to be locked by setting both active key and owner key to committee-account, a new operation account will be created for subsequent operation.



You are in breach of every single point of your WP.
Maybe you can show me the obligation you are talking about in your WP that it needs to "to maintain the BTS price" cause maybe i'm blind and i can't see it.

[bitcrab]

this is the initial logic design at the start time of OMO, now when check it again, seems it is a little too conservative.

the OMO has an advantage that other funds do not have, it has daily income of 200K BTS and also bitCNY&bitUSD market fees, so it is more powerful to resist risks - when risk appear, we can use the new coming BTS and smarcoins to increase the ratio.

now the cnytrader team do the trading based on some other logic, mainly on the margin call price and the "bottom price" in our mind, we now suppose the price of about 0.75CNY is the bottom price and it's safe enough to set the margin call price at this point.

yes, tomorrow we'll use the new coming funds to increase the ratio.

and, actually I hope committee members from USD world can take care the committee-usdoperator account and do the bitUSD trading tasks, no problem to remove me from the multisig of committee-usdoperator.

You are already planning future RP funds which i disagree.Many members already stated that this fund is already to big and leave peanuts for other WP .

You can't take future RP funds hostage

the funds is not big enough considering it's obligation. and this WP is helping to maintain the BTS price and thus maintain the value of the BTS balance in each WP.

any WP that need fund can try to attract voting to make itself above the OMO WP and get money.

[Thul3]

this is the initial logic design at the start time of OMO, now when check it again, seems it is a little too conservative.

the OMO has an advantage that other funds do not have, it has daily income of 200K BTS and also bitCNY&bitUSD market fees, so it is more powerful to resist risks - when risk appear, we can use the new coming BTS and smarcoins to increase the ratio.

now the cnytrader team do the trading based on some other logic, mainly on the margin call price and the "bottom price" in our mind, we now suppose the price of about 0.75CNY is the bottom price and it's safe enough to set the margin call price at this point.

yes, tomorrow we'll use the new coming funds to increase the ratio.

and, actually I hope committee members from USD world can take care the committee-usdoperator account and do the bitUSD trading tasks, no problem to remove me from the multisig of committee-usdoperator.

You are already planning future RP funds which i disagree.Many members already stated that this fund is already to big and leave peanuts for other WP .

You can't take future RP funds hostage

[bitcrab]

as BTS price now grow up to above 2CNY, now it's time to adjust the rule to determine minimum collateral ratio in open market operation fund account.

we need the minimum ratio to increase with feed price, with a nonlinear decreasing rate。

I found below formula is likely a suitable choice, in the next price stage it will be used to determine the minimum collateral rate.



please advise if you have any ideas on this.

this is the initial logic design at the start time of OMO, now when check it again, seems it is a little too conservative.

the OMO has an advantage that other funds do not have, it has daily income of 200K BTS and also bitCNY&bitUSD market fees, so it is more powerful to resist risks - when risk appear, we can use the new coming BTS and smarcoins to increase the ratio.

now the cnytrader team do the trading based on some other logic, mainly on the margin call price and the "bottom price" in our mind, we now suppose the price of about 0.75CNY is the bottom price and it's safe enough to set the margin call price at this point.

yes, tomorrow we'll use the new coming funds to increase the ratio.

and, actually I hope committee members from USD world can take care the committee-usdoperator account and do the bitUSD trading tasks, no problem to remove me from the multisig of committee-usdoperator.



 

[Thul3]

usd commitee account already under 2.25 Ratio

https://wallet.bitshares.org/#/account/committee-usdoperator

[Thul3]

2. operators need to take good care while operate with debt positions, as an initial rough principle, when BTS price is under 2CNY:
while collateral ratio > 4, borrowing more smartcoin is allowed.
while 4>collateral ratio>3, smartcoin income can be used to buy more BTS, but borrowing more smartcoin is not allowed.
while 3>collateral ratio, smartcoin income need to be used to reduce debt position, buying more BTS is not allowed.

Both accounts are clearly under Ratio of 3 and were not allowed to buy any BTS


Also big part of  commitee funds buy orders are also under spring trader buy orders .....

[Thul3]

That fund already being abused?

That funds was declared to be used to create bit assets and to buy BTS .

Currently you can clearly see that this fund isn't being used to buy BTS but to create a big buy wall together with the spring funds.

This is a clear market manipulation using funds which were never supposed to create buy walls.
As easy as it can be used as buy walls as easy it can be used as sell walls.

Controlling these amount of funds by a few people gives them power i don't agree with.

[JonnyB]

makes sense, well done for opposing a clear conflict of interest

[xeroc]

@bitcrab: I'll have to remove my support for the worker "committee controlled open market operation fund".
The reasons are the *potential* conflict of interst that emerged with SPRING. Given that SPRING is a market
making fund, and the worker is funding another fund for providing liquidity, I believe it is best to not continue
subsidizing open market operations through a worker and leave the bussiness for SPRING (and other for-profit
competitors). This also puts you (@bitcrab) in a much nicer situation as you don't need to justify why you traded
when since you potentially could have SPRING trade against the open market worker.
Surely you understand my reasoning.

[xeroc]

The last report is over 2 months old, when can we expect new one?

I would like to see a break down too

[paliboy]

The last report is over 2 months old, when can we expect new one?