Author Topic: is it a good idea to disable force settlement and black swan for bitCNY?  (Read 8527 times)

0 Members and 1 Guest are viewing this topic.

Offline bitcrab

  • Committee member
  • Hero Member
  • *
  • Posts: 1926
    • View Profile
  • BitShares: bitcrab
  • GitHub: bitcrab
BSIP42 now worked fairly well in bitCNY. in several days the bitCNY premium decreased from above 5% to about 0.35%(this moment).

however, we are now facing 2 problems:

1. based on BSIP42, feed price may be much higher than Pdex(BTS price in DEX in bitCNY) in bear market, it may also be much lower than Pdex in bull market, now we have a 5% force settlement offset for bitCNY, but in bull market, it's possible that feed price be more than 5% lower than Pdex, at that time there will be chance for bitCNY holders to make profit by exploiting the debt position owners.

2. black swan possibility increased? now feed price is 12.3% higher than the latest price in DEX, many margined called orders just stayed there without being eaten, at this moment the highest call price in these orders is 0.9088, and we have a global settlement price of 0.5193.

I feel now force settlement and black swan now make little sense for bitCNY, especially after the BSIP implementation.

bitCNY has a force settlement offset of 5% for long time, it is seldom used, no obvious impact on the pegging of bitCNY. thanks to the good liquidity of bitCNY, bitCNY pegging depend little on the force settlement feature.

after BSIP42 implementation, it is the negative feedback mechanism, not the sufficient collateral promise that play the key role for bitCNY pegging, now when bitCNY is close to black swan, bitCNY will also has very high premium, the negative feedback mechanism will work to help to recover the BTS price. no need to trigger global setting.

in my view, for bitCNY, force settlement and black swan now make little sense but bring some trouble, I wonder whether it is possible to disable these 2 features.

any thoughts? we need sufficient discussion on this topic, no need to rush to a conclusion.
« Last Edit: October 02, 2018, 10:24:44 am by bitcrab »