Author Topic: suggest to disable forcesettlement for bitCNY  (Read 2006 times)

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Offline binggo

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Re: suggest to disable forcesettlement for bitCNY
« Reply #15 on: November 06, 2018, 02:44:02 pm »
Quote
We have the choice, If use the highest price as the last feed price, we can keep the forcesettlement and the dynamically feed price.
Quote
Couldn't an external actor target this sole 'highest price' to force an inflation of the feed price to attack collateral holders?

the highest price is not the"highest", it come from the no bsip 42  feed price and bsip 42 feed price,  most of the time the feed price will be no the bsip 42 feed price, when the price of bts fall fast  which caused by the margin call, the feed  price may be bsip 42 feed price.
« Last Edit: November 06, 2018, 02:46:44 pm by binggo »

Offline Thul3

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Re: suggest to disable forcesettlement for bitCNY
« Reply #16 on: November 06, 2018, 03:24:08 pm »
if it is impossible to disable force settlement, I think there's only one choice to fix the bug: request that the feed price not lower than market price*96% for CNY, not lower than market price for USD.

So you are now breaking the peg for bitcny which was so important to you at all cost?
« Last Edit: November 06, 2018, 03:27:01 pm by Thul3 »

Offline bitcrab

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Re: suggest to disable forcesettlement for bitCNY
« Reply #17 on: November 06, 2018, 03:38:56 pm »
if it is impossible to disable force settlement, I think there's only one choice to fix the bug: request that the feed price not lower than market price*96% for CNY, not lower than market price for USD.

So you are now breaking the peg for bitcny which was so important to you at all cost?

I know this is not a perfect solution to solve the current issue and may break the peg, is there any better way? how about to increase the force settlement offset?

Offline johnson

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Re: suggest to disable forcesettlement for bitCNY
« Reply #18 on: November 06, 2018, 11:09:33 pm »
if it is impossible to disable force settlement, I think there's only one choice to fix the bug: request that the feed price not lower than market price*96% for CNY, not lower than market price for USD.

So you are now breaking the peg for bitcny which was so important to you at all cost?

I know this is not a perfect solution to solve the current issue and may break the peg, is there any better way? how about to increase the force settlement offset?



increase the feed price

Offline johnson

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Re: suggest to disable forcesettlement for bitCNY
« Reply #19 on: November 07, 2018, 05:01:42 am »
if it is impossible to disable force settlement, I think there's only one choice to fix the bug: request that the feed price not lower than market price*96% for CNY, not lower than market price for USD.
You always know, disable settlement is impossible. No one will support it.
So, the best way is increaseing the feed price, and feed price should higher than market price * 96%.

Offline sschiessl

Re: suggest to disable forcesettlement for bitCNY
« Reply #20 on: November 07, 2018, 08:14:16 am »
Chance for speculator to exploit debt position owners is implicit arbitrage and will be healthy for the market. How can it be exploited? The Force Settlement Offset is 5%, which should make it hard enough. Please elaborate

Force settlement is a feature that must remain available IMO, it is a worst-case scenario measure. It will certainly never be used in a liquid market, the UI prominently shows the user if the market is the better choice.
But if there is any incident that the market crashes, the force settlement option must be available and I would not want to wait for anyone to activate it then.

I own a debt position with CR=3, now you force me to sell the collateral to you with a under market price, this is not exploiting, are you joking?

I simply haven't understood yet how the exploitation works.

Just to clarify for me, example from your picture:
Code: [Select]
latest price (LP) = 0.675035
settlement price (SP) = 0.670566
force settlement offset multiplier (FSOM) = 0.95
Now assume I hold 100 bitCNY
  • I can sell on free market and get 100 * 1 / LP=148.14 BTS
  • I can force settle, now assume it would happen instantly then I get 100 * 1 / SP=149.12*FSOM=141.67 BTS
As the holder of the bitCNY this only gives me profit if LP * FSOM > SP. But, as long as LP > SP, the holder of the margin position would have a loss compared to latest price, i.e. someone could pay to hurt you (unlikely to happen though). This does not take the force settle delay into account.

I think I understand the situation now, and I would agree this should be adressed. But not by disabling force settlement, but by ensuring that LP * FSOM <= SP is maintained.

Just in general: The flag "DISABLE FORCE SETTLING" should be able to do exactly that, maybe a core dev could confirm. Not that I advertise this solution.
« Last Edit: November 07, 2018, 08:23:17 am by sschiessl »

Offline bitcrab

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Re: suggest to disable forcesettlement for bitCNY
« Reply #21 on: November 07, 2018, 09:45:30 am »
I simply haven't understood yet how the exploitation works.

Just to clarify for me, example from your picture:
Code: [Select]
latest price (LP) = 0.675035
settlement price (SP) = 0.670566
force settlement offset multiplier (FSOM) = 0.95
Now assume I hold 100 bitCNY
  • I can sell on free market and get 100 * 1 / LP=148.14 BTS
  • I can force settle, now assume it would happen instantly then I get 100 * 1 / SP=149.12*FSOM=141.67 BTS
As the holder of the bitCNY this only gives me profit if LP * FSOM > SP. But, as long as LP > SP, the holder of the margin position would have a loss compared to latest price, i.e. someone could pay to hurt you (unlikely to happen though). This does not take the force settle delay into account.

I think I understand the situation now, and I would agree this should be adressed. But not by disabling force settlement, but by ensuring that LP * FSOM <= SP is maintained.

Just in general: The flag "DISABLE FORCE SETTLING" should be able to do exactly that, maybe a core dev could confirm. Not that I advertise this solution.

you misunderstood the price.

in GUI settlement price = feed price/FSOM

so when you settle with 100 bitCNY, you will get 100/SP = 149.13 BTS

this force the debt position owners to sell the BTS under market price, it's exploitation,right?

each time feed price fall below market price*FSOM, this exploitation may happen,

when I wrote this things are even worse: latest price = 0.69, feed price = 0.643683, settlement price = 0.67587, 2.09% lower than market price.

Offline crazybit

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Re: suggest to disable forcesettlement for bitCNY
« Reply #22 on: November 07, 2018, 10:28:55 am »
voted, i agree to disable force settlement temporarily to protect the BTS holder

Offline binggo

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Re: suggest to disable forcesettlement for bitCNY
« Reply #23 on: November 07, 2018, 12:43:09 pm »
voted, i agree to disable force settlement temporarily to protect the BTS holder

All is temporarily,so

Offline pc

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Re: suggest to disable forcesettlement for bitCNY
« Reply #24 on: November 07, 2018, 12:55:23 pm »
From all the previous discussion around BSIP-42, my understanding was that this situation indicates an oversupply of bitCNY.

Shorters can now buy bitCNY on the market and reduce their own debt positions, which should reduce supply, drive the market price down and improve their collateral ratio, thereby reducing the likelyhood that they will be settled.

No need to change the rules yet again IMO.
Bitcoin - Perspektive oder Risiko? ISBN 978-3-8442-6568-2 http://bitcoin.quisquis.de

Offline yamtt

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Re: suggest to disable forcesettlement for bitCNY
« Reply #25 on: November 07, 2018, 01:12:31 pm »
There is no need to cancel mandatory liquidation if the mandatory liquidation incentive is changed to 110% to offset the price difference due to negative feedback from the feed price

如果把强制清算奖励改成110% 来抵消喂价负反馈所产生的差价 那么就没必要取消强制清算

Offline johnson

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Re: suggest to disable forcesettlement for bitCNY
« Reply #26 on: November 07, 2018, 02:58:11 pm »
强清导致内盘bts价格下跌,同时导致bitcny 产量减少。当内盘价格远远低于外盘价格,搬砖党开始
充值搬砖。然后拉低内外盘价差。搬砖的充值动作使充值费率上升,充值费率上升使喂价上升。
强清停止。
这就是当前喂价的调节逻辑啊,为啥要去掉强清呢?
强清有问题吗?没问题。
但是问题出在哪?出在调节的链路太长了。喂价应该包含市场成交价的信息,不论是外盘价格还是内盘价格,
喂价算法总要包含一个的。



Offline abit

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Re: suggest to disable forcesettlement for bitCNY
« Reply #27 on: November 07, 2018, 08:48:24 pm »
I've foreseen the situation when drafting BSIP42, see https://github.com/bitshares/bsips/blob/master/bsip-0042.md#uptrend-and-discount . In short, a static force settlement offset is not quite compatible with BSIP42 when a bitAsset is oversupplied. BSIP42 aims to let debt position holders reduce debt at market/fair price, but not at higher price to punish them. If we agree with BSIP42, we either need to adjust force settlement offset dynamically, or disable force settlement temporarily.

I've explained why disabling force settlement is doable in this thread https://bitsharestalk.org/index.php?topic=27170.0 . I'm not going to explain again. I'm not going to push anything. It's no fun.

I feel very very disappointed now.

After experimented BSIP42 for 2 months, which has shown obvious effects towards a tight peg, people still didn't understand the ins and outs, including the ones who appeared to support BSIP42 (e.g. Fabian @xeroc), not even mentioning the ones who voted "NO" without even written anything in this forum. All discussions came to a dead end. No progress. Nothing. Not even a valid argument. When people just say no but don't tell you why, how you can improve? We're all 5? It's that hard to discuss rationally? It's that waste of your time to learn a bit more?

These are our community? These are our voters / stake holders? These are the people who will decide the future of BitShares? I'd say there is no future. It's easy to make an experiment fail but hard to make it succeed. You decide. I'm out. I'm tired.

OK, some of you asked for a fix for the MCR issue. I've submitted the code (the fix) to github 2 months before, whoever wants to test it and push it online can go ahead, or write your own fix. Actually, adjusting MCR is effectively the same as adjusting price feed + force settlement offset, so, before the fix is online, we can do something to keep things going, however, whether to do and what to do also depends on you.

Update:
Properly punishing debt position owners when a bitAsset is oversupplied is fine, since it encourages them to reduce supply proactively. From this point of view, forced settlements can still play a role in the game, although it can be replaced by forced margin calls. The thing is, target CR doesn't apply when a debt position is being forced settled, so, not like margin calls which evenly apply to all positions with (relatively) low CR, force settlements may punish a few positions too hard, but don't punish other positions at all, so it's IMHO not a fair enough rule.
« Last Edit: November 07, 2018, 10:15:05 pm by abit »
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Offline oxarbitrage

Re: suggest to disable forcesettlement for bitCNY
« Reply #28 on: November 07, 2018, 11:50:51 pm »
Without having an opinion in regards BSIP42 and related as they are beyond my understanding I really hope that the efforts from @abit are appreciated as i am sure he want the best for Bitshares as a whole. By what i saw in the last time his position and also @bitcrab are target of constant attacks, for the good of all us I hope rational consensus is achieved in this subjects that will allow bitshares to grow in the stable coin aspect, one of the most important pieces of our blockchain.

I believe Bitshares have the technology, experience and everything needed to be number 1 in the stable coin market, for this we should fight together as a community or die trying  :)

Offline ebit

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Re: suggest to disable forcesettlement for bitCNY
« Reply #29 on: November 08, 2018, 12:12:01 am »
bitcny has mellowed ,please remove the fence .