Author Topic: Smartcoins with price trends similar to CNY and USD, but higher volatility (σ)  (Read 664 times)

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Offline btsindex

So.. the idea is creating smart assets with price feeds based on feeds of popular smart assets (bitCNY, bitUSD) but raised to the power of 2 or 3
Any change in the original CNY, USD price feeds will produce bigger change in squared and cubed alternatives.
The point is those alternatives are more risky than base assets, but possible profits are also higher

For example:

Current USD price: 4.6 BTS/USD, CUBED.USD price would be 97.336 BTS/CUBED.USD
Assume we have 2000 BTS and buy both USD and CUBED.USD, with 1000 BTS for each.
Now we have 217.391304348 USD and 10.273691132 CUBED.USD,

Let's say next day USD prices changes to 4.8 BTS/USD, CUBED.USD price will be 110.592 BTS/CUBED.USD
Selling 217.391304348 USD we will get 1043.47826087 BTS (+4.3%)
Selling 10.273691132 CUBED.USD - 1136.18804967 BTS (+13.6%)

The same math works with loses

What do you think about the idea and naming (SQUARED.USD, SQUARED.CNY, CUBED.USD, CUBED.CNY)?

One more related thing:
What about INVERTED.USD, INVERTED.CNY with the power of -1 (x-1 = 1 / x)?
The benefit would be ability to play short when base assets' prices go up..x
« Last Edit: April 18, 2018, 08:19:27 am by btsindex »

Offline Customminer

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Neat idea, created a couple quick graphs above to explore the price impact.

What do you think about volatility indexes for the most popular smart assets?
Hertz, Beyond Bitshares, Gridcoin!

Offline btsindex

Wow! Thanks. It's a great idea to visualize the transformations. I'll go further and use BTS/USD history from the beginning of 2018 to draw some more charts:

BTS/USD


BTS/SQUARED.USD


BTS/CUBED.USD


BTS/INVERTED.USD


Did you mean adding EUVIX or JYVIX as smart assets or calculate volatility indexes of bitCNY and bitUSD with respect to BTS? By the way is there a general crypto index (like averaged DJI, but for top 20 coins) and corresponding crypto-volatility index?

Offline Customminer

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Quote
Did you mean adding EUVIX or JYVIX as smart assets or calculate volatility indexes of bitCNY and bitUSD with respect to BTS? By the way is there a general crypto index (like averaged DJI, but for top 20 coins) and corresponding crypto-volatility index?

I meant bitCNY & bitUSD, however VIX would be an interesting smartcoin too given that you can't directly buy/trade VIX tokens in the fiat market (AFAIK). That said, it broke in february, didn't it? http://fortune.com/2018/02/06/bitcoin-stock-volatility-vix-sec/

bit20 is a relevant index: http://www.bittwenty.com/

Googling found the following information on crypto volatility indexes: (no endorsement)
https://www.sifrdata.com/cryptocurrency-volatility-index/
https://medium.com/@cryxio/cryx-cryptocurrency-volatility-index-cvx-bcb5324ac0ac
Hertz, Beyond Bitshares, Gridcoin!

Offline btsindex

Same thought experiment with bitCNY:

Assume we have 2000 BTS and we invest in both CNY and CUBED.CNY (1000 each)
Current feed price is 0.72974 BTS/CNY or ~0.3886 BTS/CUBED.CNY
With 1000 BTS we can buy: ~1370.351 CNY and ~2573.34 CUBED.CNY

If the bitCNY price changes to 0.75 BTS/CNY (so CNY3 price is 0.421875 BTS/CUBED.CNY) and we sell our bitAssets, we get:
1370.351 CNY → 1027.76325 BTS (+2.78%)
2573.34 CUBED.CNY → 1085.6278125 BTS (+8.56%)


Offline btsindex

Quote
Did you mean adding EUVIX or JYVIX as smart assets or calculate volatility indexes of bitCNY and bitUSD with respect to BTS? By the way is there a general crypto index (like averaged DJI, but for top 20 coins) and corresponding crypto-volatility index?

I meant bitCNY & bitUSD, however VIX would be an interesting smartcoin too given that you can't directly buy/trade VIX tokens in the fiat market (AFAIK). That said, it broke in february, didn't it? http://fortune.com/2018/02/06/bitcoin-stock-volatility-vix-sec/

bit20 is a relevant index: http://www.bittwenty.com/

Googling found the following information on crypto volatility indexes: (no endorsement)
https://www.sifrdata.com/cryptocurrency-volatility-index/
https://medium.com/@cryxio/cryx-cryptocurrency-volatility-index-cvx-bcb5324ac0ac

Thank you! Haven't heard about Bit20 and SIFR Vol. It'd be interesting to implement those indexes as bitAssets.
Currently I'm testing INDEXDJI, INDEXSPX and INDEXNASDAQ (https://bitsharestalk.org/index.php?topic=26265.0). A server that pushes price feeds is quite stable, so if everything works ok, i'll activate a second server for extra stability and probably add some more indexes

Offline btsindex

Just launched the CUBED.USD smart-coin: https://wallet.bitshares.org/#/asset/CUBED.USD/

As described above, its price feed is based on bitUSD. Raising values to the power of 3 increases volatility (variance) significantly.

Current USD3 feed price is 390.8 BTS/CUBED.USD ( ~ 7.313 )

CNY3: 1.35385 BTS/CUBED.CNY (~ 1.13)
CNY2: 1.22381 BTS/SQUARED.CNY (~ 1.12)

To get USD3 click Borrow CUBED.USD on top of BUY/SELL tabs
« Last Edit: June 30, 2018, 05:12:25 pm by btsindex »

Offline btsindex

CNY and CNY³ bit-assets during last two crazy months. It's probably better to put more collateral BTS when borrowing CUBED.CNY or CUBED.USD compared to bitCNY and bitUSD. Risk of margin call is really high (i've already f* up some bitshares because of low ratio and one of the price jumps). Be careful:)

« Last Edit: July 02, 2018, 05:07:38 pm by btsindex »