Author Topic: [worker proposal] - Poll on implementing updated BSIP42 on bitCNY  (Read 17773 times)

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Offline bitcrab

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another fact I need to talk is that the improved algorithm of margin call(sell part)  make the sell smooth, this can encourage people buy margin call order, reduce the blackswan risk.
the lower MCR given, the low effect from this new alogrithm. it will totally lose effect when MCR reduce to 1.

“encouraging” is always limited if supposing the total supply is always limited by the fixed MCR. and shortage of bitCNY always make bitCNY holders to expect even cheaper BTS.

lower MCR will bring more bitCNY supply, and definitely, not possible to reduce MCR to 1.

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Offline yamtt

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another fact I need to talk is that the improved algorithm of margin call(sell part)  make the sell smooth, this can encourage people buy margin call order, reduce the blackswan risk.
the lower MCR given, the low effect from this new alogrithm. it will totally lose effect when MCR reduce to 1.

Reduce human factors in order to make the system healthy, or adjust it under the mssr, has no warehouse explosion, the current adjustment is the best time.

Offline alt

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another fact I need to talk is that the improved algorithm of margin call(sell part)  make the sell smooth, this can encourage people buy margin call order, reduce the blackswan risk.
the lower MCR given, the low effect from this new alogrithm. it will totally lose effect when MCR reduce to 1.

Offline alt

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I didn't see any point to  get profit from it, if you have you should do it.
As a trader I will never borrow a cent  if you can make me margin call without  price of BTS change, sometimes even when BTS price increase.

can I manipulate the feed price at will? or any witness can? if I can why I let my accounts be margin called?

I understand that because bsip42 let witnesses feed price following a complex logic, it introduce some uncertainty that make traders do not feel good, so in the newly advised alternative solution witnesses only feed price and premium data, which are easy to verify accurate or not, the negative feedback logic will be done by the system in a low frequency.

the system need negative feedback logic, the rule of original system is far from satisfactory and cannot sustain the dream of Bitshares. and I don't think we can call DEX free market only when we make no change to the rules.
As a trader, I don't care if you can manipulate the price or not.
All I known is that my debt could be margin call even when the price of BTS increase.
Why I need to take this risk? 
You have a good expect, but nobody will play with your in this market rule.

Those were my thoughts as well which is why I suggested limiting the possible dynamic movement of MCR/MSSR.

If you know that MCR will NEVER go above 2.0 for example, you just keep it over 2.0 and be just as safe.

A brief/rough description is here: https://bitsharestalk.org/index.php?topic=27360.msg324958#msg324958
But if people just keep it over 2.0, what's the meaning of reduse MCR to 1.75/1.5? Did reduce MCR really increase the supply?
For a rational trader, they have their own reasonable leverage which must bigger than the highest MCR  which are allowed to use.
only those high risk debt could be affected by MCR, they will borrow as more as possible, then there is a high possibility they will lose everything.
Should we and can we increase the supply by these high risk debts?
In general, I still hold the view that we just need a stable MCR, if we really need to adjustment, an announcemant several days in advance should be given.

Offline bench

Variable MCR (1.5-2) should result in less margin calls. MCR of 1.25 is too low for the market.

After a price drop we can lower the MCR to 1.5 and reduce premiums, after a price rise the premium should get lower and MCR can rise without getting additional margin calls. 
« Last Edit: December 04, 2018, 09:14:38 pm by bench »
Be part of the change and vote for the bitshares-vision proxy!

Offline Thom

why don't we improve step by step?
I guess reduce MSSR will be more easy to reach the concenses.
But dynamic tuning the MCR is not acceptable for me,  at least you need to give enough time to the shorters before adjustment the MCR.
you just can't make me margin call when you decide to increase the MCR next seconds. I consider this as   manipulation.

I understand that letting witness tune MCR introduce much uncertainty, so now in my mind it will be better if we can do this in another way, like:

1.witnesses just feed market price and premium.

2.system tune MCR periodically based on the fed premium, for example the rule can be: system adjust MCR every hour, if premium is inside -2%-1%, do not adjust the MCR, otherwise, tune it 0.001(start point 1.75) to according direction. 

maybe need to set max and min limit on MCR, for example 1.25-2.

however I am not sure whether this is technological possible and whether community can reach consensus on this.

This sounds like the most reasonable proposal I've seen from you @bitcrab:
- it requires honest market price reporting
- it sets limits on MCR adjustment
- preserves baseline collateral at 1.75

Clearly trade-offs are required between various "feed factions" that want their advantage / opinions implemented. This is easier to understand, easier for witnesses. Will it work?

Depends on the goals you have. We need to define those, otherwise we'll all vacillate between appeasing one camp or another.
Main things we need to define is what is minimum safety - i.e. absolute limits on MCR and how tight the peg must be held.
Another consideration is do we need to define different sets of limits when market is "volatile", and how to define what metrics to use to say market is volatile. You could define criteria that sets a boolean "isVolatile" flag, or, it could be an analog value from 0 (stable) to 1 (volatile). Perhaps this is same or similar to what is now labeled "premium". Can't say I understand how "premium" is calculated and what factors are involved. 

Also, why not publish a report to describe all this great knowledge learned from experimentation so we ALL can learn? Still waiting on that. If you've learned so much please summarize these "golden lessons" for those of us with lessor economic skills. Please help raise our understanding with a summary.
Injustice anywhere is a threat to justice everywhere - MLK |  Verbaltech2 Witness Reports: https://bitsharestalk.org/index.php/topic,23902.0.html

Offline clockwork

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I didn't see any point to  get profit from it, if you have you should do it.
As a trader I will never borrow a cent  if you can make me margin call without  price of BTS change, sometimes even when BTS price increase.

can I manipulate the feed price at will? or any witness can? if I can why I let my accounts be margin called?

I understand that because bsip42 let witnesses feed price following a complex logic, it introduce some uncertainty that make traders do not feel good, so in the newly advised alternative solution witnesses only feed price and premium data, which are easy to verify accurate or not, the negative feedback logic will be done by the system in a low frequency.

the system need negative feedback logic, the rule of original system is far from satisfactory and cannot sustain the dream of Bitshares. and I don't think we can call DEX free market only when we make no change to the rules.
As a trader, I don't care if you can manipulate the price or not.
All I known is that my debt could be margin call even when the price of BTS increase.
Why I need to take this risk? 
You have a good expect, but nobody will play with your in this market rule.

Those were my thoughts as well which is why I suggested limiting the possible dynamic movement of MCR/MSSR.

If you know that MCR will NEVER go above 2.0 for example, you just keep it over 2.0 and be just as safe.

A brief/rough description is here: https://bitsharestalk.org/index.php?topic=27360.msg324958#msg324958

Offline yamtt

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Support for gradual reduction of MSSR Until 105%

Offline alt

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I didn't see any point to  get profit from it, if you have you should do it.
As a trader I will never borrow a cent  if you can make me margin call without  price of BTS change, sometimes even when BTS price increase.

can I manipulate the feed price at will? or any witness can? if I can why I let my accounts be margin called?

I understand that because bsip42 let witnesses feed price following a complex logic, it introduce some uncertainty that make traders do not feel good, so in the newly advised alternative solution witnesses only feed price and premium data, which are easy to verify accurate or not, the negative feedback logic will be done by the system in a low frequency.

the system need negative feedback logic, the rule of original system is far from satisfactory and cannot sustain the dream of Bitshares. and I don't think we can call DEX free market only when we make no change to the rules.
As a trader, I don't care if you can manipulate the price or not.
All I known is that my debt could be margin call even when the price of BTS increase.
Why I need to take this risk? 
You have a good expect, but nobody will play with your in this market rule.

Offline bitcrab

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I didn't see any point to  get profit from it, if you have you should do it.
As a trader I will never borrow a cent  if you can make me margin call without  price of BTS change, sometimes even when BTS price increase.

can I manipulate the feed price at will? or any witness can? if I can why I let my accounts be margin called?

I understand that because bsip42 let witnesses feed price following a complex logic, it introduce some uncertainty that make traders do not feel good, so in the newly advised alternative solution witnesses only feed price and premium data, which are easy to verify accurate or not, the negative feedback logic will be done by the system in a low frequency.

the system need negative feedback logic, the rule of original system is far from satisfactory and cannot sustain the dream of Bitshares. and I don't think we can call DEX free market only when we make no change to the rules.
Email:bitcrab@qq.com

Offline alt

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Imagine the national adjust the interest rate dynamic, totally free to increase or reduce, whatever if they have the logic or not.
The rate could increase today while decrease tomorrow.
would you still regard reduce rate as stimulate the economy? would you borrow more when you don't known if they will increase the rate again next second?

I haven't seen any serious central bank has reduce interest rate first and increase rate at the next second, interest rate is an important tool for central bank to push the currency policy.
so why witness can decrease MCR today while increase tomorrow even without an previous anouncement? MCR is even more important than interest rate. it can make margin call happen directely without price change.
If MCR unstable like this, could you regard decrease MCR as a safe signal to borrow more money?
Quote
whatever adjust the feed price or MCR, the problem is a normal rational trader should not consider reduce MCR as they can borrow more safely.
In fact, it only affect to those risk short position which is very close or already margin call.
Do you wish to encourage them borrow more or decrease the debt ?

whether borrowing is safe not only depend on the market, but also on the rule.
one simple example/logic: at the time that bitCNY is in high premium as of now, when MCR is reduced, one can borrow say 100K bitCNY and get 102K CNY, when premium go down to -1%, MCR return to high level, he can buy 103KbitCNY with 102KCNY, pay the 100K debt and get 3K as profit.

does this business make sense? yes, one can make profit with it, and help to balance the ecosystem.

why not encourage this kind of business?
I didn't see any point to  get profit from it, if you have you should do it.
As a trader I will never borrow a cent  if you can make me margin call without  price of BTS change, sometimes even when BTS price increase.
« Last Edit: December 04, 2018, 08:59:38 am by alt »

Offline bitcrab

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Imagine the national adjust the interest rate dynamic, totally free to increase or reduce, whatever if they have the logic or not.
The rate could increase today while decrease tomorrow.
would you still regard reduce rate as stimulate the economy? would you borrow more when you don't known if they will increase the rate again next second?

I haven't seen any serious central bank has reduce interest rate first and increase rate at the next second, interest rate is an important tool for central bank to push the currency policy.

whatever adjust the feed price or MCR, the problem is a normal rational trader should not consider reduce MCR as they can borrow more safely.
In fact, it only affect to those risk short position which is very close or already margin call.
Do you wish to encourage them borrow more or decrease the debt ?

whether borrowing is safe not only depend on the market, but also on the rule.
one simple example/logic: at the time that bitCNY is in high premium as of now, when MCR is reduced, one can borrow say 100K bitCNY and get 102K CNY, when premium go down to -1%, MCR return to high level, he can buy 103KbitCNY with 102KCNY, pay the 100K debt and get 3K as profit.

does this business make sense? yes, one can make profit with it, and help to balance the ecosystem.

why not encourage this kind of business?

« Last Edit: December 04, 2018, 07:12:37 am by bitcrab »
Email:bitcrab@qq.com

Offline alt

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I will not regard the price as 0.35 CNY when I known the witness can change the price back to 0.32 CNY at anytime.
so what's the point of increase the feed price to 0.35CNY? did it really  increase the supply?

higher feed price/lower MCR means user can borrow more bitCNY with the same collateral.that's how it increase the supply.

witnesses has the logic that feed price depending on the market price and premium, not to feed price at will.
Imagine the national adjust the interest rate dynamic, totally free to increase or reduce, whatever if they have the logic or not.
The rate could increase today while decrease tomorrow.
would you still regard reduce rate as stimulate the economy? would you borrow more when you don't known if they will increase the rate again next second?

whatever adjust the feed price or MCR, the problem is a normal rational trader should not consider reduce MCR as they can borrow more safely.
In fact, it only affect to those risk short position which is very close or already margin call.
Do you wish to encourage them borrow more or decrease the debt ?

Offline bitcrab

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I will not regard the price as 0.35 CNY when I known the witness can change the price back to 0.32 CNY at anytime.
so what's the point of increase the feed price to 0.35CNY? did it really  increase the supply?

higher feed price/lower MCR means user can borrow more bitCNY with the same collateral.that's how it increase the supply.

witnesses has the logic that feed price depending on the market price and premium, not to feed price at will.

 
Email:bitcrab@qq.com

Offline alt

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you guys really don't realize how critical  this manipulation will result.
A very simple example, when a potential buyer(buy BTS with CNY) known there is a posibble the margin call order will lower than 10%,
he will just stop buy until it reach.
And a potential seller(sell CNY for fiat CNY) will stop sell CNY for even 5% profit, instead they will wait for 10% profit.
The results is that traders don't known what will happen next, they just stop and wait.

if this poll get more support than 1.4.119, trader will know that bitCNY will not have a 10% premium, they know what to do.
maybe bitCNY holders will regret to lose chance to buy cheaper BTS, but it benefit the whole ecosystem as BTS need not to reach lower price and traders need not to suffer high premium of bitCNY.
this method is far from perfect, hope you can participate more in the discussion of the alternative solution of BSIP42.
I will not regard the price as 0.35 CNY when I known the witness can change the price back to 0.32 CNY at anytime.
so what's the point of increase the feed price to 0.35CNY? did it really  increase the supply?