Author Topic: New mechanism to prevent bad debt (black swan)  (Read 494 times)

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Offline bench

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New mechanism to prevent bad debt (black swan)
« on: October 19, 2018, 02:21:30 pm »
In this topic I want to discuss different ideas to prevent bad debt.

One idea was to handle margin positions depending on the collateral ratio.

Creating three groups for different ratios:
- 1.75>x>1.5: normal call price
- 1.5>x>1.25: reduced call price
- 1.25>x>1.00: sell to highest call order and reduce liquidity

What do you think ?
« Last Edit: October 19, 2018, 02:25:43 pm by bench »

Offline armin

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Re: New mechanism to prevent bad debt (black swan)
« Reply #1 on: October 19, 2018, 06:06:33 pm »
this is an even worse solution for shorters than the current one

Offline FractalNode

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Re: New mechanism to prevent bad debt (black swan)
« Reply #2 on: October 20, 2018, 08:45:03 pm »
in my opinion, we should redirect revenue from the transaction fee that is currently being transferred into the committee-trade account and return it to MPA Shorters (and MPA holders), at the same time we should start implementing BSIP 0019 and BSIP 0020. These features should be the heart of BitShares from the very beginning available to every user.

related thread
https://bitsharestalk.org/index.php?topic=26072.msg321168#msg321168
« Last Edit: October 21, 2018, 06:54:15 pm by FractalNode »

Offline bench

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Re: New mechanism to prevent bad debt (black swan)
« Reply #3 on: October 22, 2018, 02:13:57 pm »
@armin: You are right. Problem is liquidity reduction and lowering the feed price will also lower the MCR.

@FractalNode: You want to use fees to pay interest ?

We can archive market peg by changing at first:
1. MCR
2. MSQR
http://docs.bitshares.org/bitshares/user/dex-short.html

The difference of feed price and DEX price should be seen in context of EMA and DEX Price.
« Last Edit: October 22, 2018, 09:34:36 pm by bench »

Offline FractalNode

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Re: New mechanism to prevent bad debt (black swan)
« Reply #4 on: October 28, 2018, 04:34:42 pm »
@FractalNode: You want to use fees to pay interest ?

it would be necessary to make some calculations first, but yes
for everyone who keeps at least 100 bitUSD maybe more, and bitCNY of course also for bitAssets shorters 50/50
passive income is a growing trend in crypto space and will become more and more important. IMO it's time to start working to be in this circle
imagine at least 30% of unique accounts holding at least 100 bitUSD and 690 bitCNY and the effect it has on the BTS price

Quote
We can archive market peg by changing at first:
1. MCR
2. MSQR
http://docs.bitshares.org/bitshares/user/dex-short.html

The difference of feed price and DEX price should be seen in context of EMA and DEX Price.

I would not mess with those parameters as long as possible

Offline xeroc

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Re: New mechanism to prevent bad debt (black swan)
« Reply #5 on: October 30, 2018, 01:33:16 pm »
IMHO, those that go short with too little collateral shouldn't be bailed out by "profits" of everyone else.
Instead, I do believe they should be "punished" to an extend because they leave the bitasset at a risk by not maintaining their collateral.
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Offline Thom

Re: New mechanism to prevent bad debt (black swan)
« Reply #6 on: October 31, 2018, 04:18:26 am »
IMHO, those that go short with too little collateral shouldn't be bailed out by "profits" of everyone else.
Instead, I do believe they should be "punished" to an extend because they leave the bitasset at a risk by not maintaining their collateral.

Well said Xeroc!

I'm in total agreement. To do so actually rewards bad behavior by those who break the rules or don't care at all about the integrity of BitShares. Their priority is on something else (making money for themselves). Is that the type of person that should be rewarded?
« Last Edit: October 31, 2018, 04:23:26 am by Thom »
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