Author Topic: Proxies, Please Explain To Shareholders Your Plans For Recollateralization  (Read 954 times)

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Offline armin

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Your current policy makes it look like you don't want margin call to be eaten (since you decreased MSSR to 105%), instead you want to prevent a black swan on bitCNY, correct?

Do any of the Proxies have plans to make the margin call eaten?

Please give your honest opinions on which is your desired outcome

Online bitcrab

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Re: Proxies, Please Explain To Shareholders Your Plans For Recollateralization
« Reply #1 on: December 30, 2018, 04:34:08 am »
I don't think "whether you want margin call orders be eaten" is a senseful question.

I'd like to answer some senseful questions:

1.what do you think is a good way for the system to handle black swan?
2.do you want bitCNY peg more exactly? and how?

my answer:
1. as has been discussed a lot, the current global setting operation is not satisfactory, it is like system suicide, we need better way to handle black swan, one key point is not to stop smartcoin borrowing operation.

I am considering to draft a BSIP to request witnesses to ensure the feed price be higher than the global settlement price, to avoid the global settlement to happen.

2. YES
one way is dynamic MCR with the negative feedback mechanism, but as shown in https://github.com/bitshares/bitshares-core/pull/1324, this need a bugfix and hard fork that will happen in June, 2019.

in short term, what we can do is continue to reduce MSSR, from 1.1 to 1.05, to 1.02 or even to 1.

if the feed price is the market price and black swan is surely avoided, I don't care whether the margin call orders be earten or not.


« Last Edit: December 30, 2018, 04:35:46 am by bitcrab »

Offline armin

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Re: Proxies, Please Explain To Shareholders Your Plans For Recollateralization
« Reply #2 on: December 30, 2018, 04:37:08 am »

I don't think "whether you want margin call orders be eaten" is a senseful question.


If you allow margin call to be eaten, it won't go to black swan in the first place because it will recollateralize. This is why I'm asking this question


I am considering to draft a BSIP to request witnesses to ensure the feed price be higher than the global settlement price, to avoid the global settlement to happen.


If global market cap drops further, it will black swan before you can change anything. If global market cap increases, it will recollateralize by itself.


You can prevent global settlement in 2 ways: Either put a higher feed than the actual market price, or force the margin call to be eaten and debt positions increase their MCR My question is, which one will you take?

« Last Edit: December 30, 2018, 04:43:07 am by armin »

Online bitcrab

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Re: Proxies, Please Explain To Shareholders Your Plans For Recollateralization
« Reply #3 on: December 30, 2018, 04:46:07 am »

I don't think "whether you want margin call orders be eaten" is a senseful question.


If you allow margin call to be eaten, it won't go to black swan in the first place because it will recollateralize. This is why I'm asking this question


I am considering to draft a BSIP to request witnesses to ensure the feed price be higher than the global settlement price, to avoid the global settlement to happen.


If global market cap drops further, it will black swan before you can change anything. If global market cap increases, it will recollateralize by itself.

actually bitCNY has been very close to trigger black swan, witnesses have take the price feed protection measure to avoid the black swan to happen.

community has also suggested to do the same to bitUSD, it's a pity that it is not executed well.

as I know, now most witnesses include "black swan protection algorithm" in their price feeding script, what I want to do is just to write down this consensus in a BSIP.

Online sschiessl

Re: Proxies, Please Explain To Shareholders Your Plans For Recollateralization
« Reply #4 on: December 30, 2018, 06:39:36 am »
@armin

Do you have suggestions that facilitate to force the margin call to be eaten and debt positions increase their MCR?

Offline armin

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Re: Proxies, Please Explain To Shareholders Your Plans For Recollateralization
« Reply #5 on: December 30, 2018, 06:54:57 am »
Increase MSSR to 110% (slow debt eating) or 115% (aggressive eating), will cause margin call to be eaten

BTS holders should be prepared to be hurt in the short term though, but it will be better for the price in the end

Not saying it should be done, that's why I'm asking for Proxies consensus

Online yamtt

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Re: Proxies, Please Explain To Shareholders Your Plans For Recollateralization
« Reply #6 on: December 30, 2018, 09:42:45 am »
Increase MSSR to 110% (slow debt eating) or 115% (aggressive eating), will cause margin call to be eaten

BTS holders should be prepared to be hurt in the short term though, but it will be better for the price in the end

Not saying it should be done, that's why I'm asking for Proxies consensus

Mssr will only cause the increase in such a series of warehouse explosion cycle, until the trigger black swan, which is a disaster for bts, mssr should be 100.

Online binggo

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Re: Proxies, Please Explain To Shareholders Your Plans For Recollateralization
« Reply #7 on: December 30, 2018, 04:00:58 pm »
Increase MSSR to 110% (slow debt eating) or 115% (aggressive eating), will cause margin call to be eaten

BTS holders should be prepared to be hurt in the short term though, but it will be better for the price in the end

Not saying it should be done, that's why I'm asking for Proxies consensus

Increase MSSR to 110% (slow debt eating) or 115% (aggressive eating), will cause margin call to be eaten?!

don't think things like a baby!

ok?

and don't act like a child, please think somethings more deeper.


Online Thul3

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Re: Proxies, Please Explain To Shareholders Your Plans For Recollateralization
« Reply #8 on: December 30, 2018, 04:21:59 pm »
Having a MSSR of 100 will only lead that borrowers will be even more reckless with holding a secure MCR since there will be no more punishment for bad debt.
Margin walls will be quickly bigger as majority of debt  holder willl be near 1.75 since he can't lose anything.
« Last Edit: December 30, 2018, 04:44:39 pm by Thul3 »

Offline armin

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Re: Proxies, Please Explain To Shareholders Your Plans For Recollateralization
« Reply #9 on: December 30, 2018, 05:21:19 pm »
The high feed/low mssr (cause effectively the same outcome) is what has allowed undercollateralization in bitUSD for an artificially long time, leading to a black swan. There was no black swan before. If MCR is immediately increased by selling the BTS collateral, then black swan cannot occur.

Please do not post biased opinions, think clearly, this thread is for Proxies reply only

I think Thul3 has made a Proxy so it is fine

Online yamtt

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Re: Proxies, Please Explain To Shareholders Your Plans For Recollateralization
« Reply #10 on: December 30, 2018, 05:32:40 pm »
Having a MSSR of 100 will only lead that borrowers will be even more reckless with holding a secure MCR since there will be no more punishment for bad debt.
Margin walls will be quickly bigger as majority of debt  holder willl be near 1.75 since he can't lose anything.

After mssr is equal to 100, the main effect of bts is acceptance, is not lever, strong clear the premium problem that can solve accept to bring, Bts assets other than bts and bitxx require only a few hundred bts to be created, leading early entrants to mistrust of bts's de-centralised exchanges. What we need to do now is develop acceptance. And perfect bsip44, let cross catenary to come at an early date, this ability is what we want to solve truly.

Online bitcrab

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Re: Proxies, Please Explain To Shareholders Your Plans For Recollateralization
« Reply #11 on: January 03, 2019, 04:33:28 am »
suppose now:

feed price is the real market price.
feed price black swan protection implemented, feed price is ensured to be above GS price to protect GS from happening.

then while the BTS price is from high to low, bitCNY premium is from low to high, the whole market condition can be divided into 4 phases:

1.bitCNY discount > force settlement offset (current value 2%)
because of the force settlement, even bitCNY enter into phase it will soon get out.

2.bitCNY discount < force settlement offset & bitCNY premium < (MSSR-1) 
in this phase, the margin call orders will be eaten immediately after it is generated, risk will not be accumulated and bitCNY peg well, this is the ideal phase.

3.bitCNY premium > (MSSR-1)
in this phase the margin call orders will stay there without being eaten, GS price will not drop while the feed price drop, risk accumulate.

4.market price drop below the GS price
as black swan protection measure implemented, GS will not happen, feed price will stop to drop following the market price, if BTS price continue to drop, bitCNY will devalue.

in phase 2 the economy is healthy.

phase 4 means the ecosystem is in financial crisis,currency devalue。

phase 3 is a status between 2 and 3.

in Bitshares phase4 will always happen once every half to more than 1 year, and phase3 is a phase that we always meet.

black swan protection make it a "soft landing" while entering phase 4, this is much better than global settlement and benefit reviving.

if we reduce MSSR to say 1.02, it will make even in phase 3 the smatcoin is still in a not too high premium, and make phase 3 more acceptable.

if we increase MSSR to say 1.15 or higher, it will make in phase 3 smartcoin is in very high premium, and make phase 3 less acceptable.

if we implement dynamic MCR in the future, we will change a big part of phase 3 to phase 2.

smartcoin system is a stable coin issuing system based on debt, we need to optimize the rules to balance the asset and debt, not only emphasizing "to release risk".

frankly speaking, in current condition we need to reduce MCR, before we can do this, we need not to try to make all the margin call orders be eaten.
« Last Edit: January 03, 2019, 10:26:37 am by bitcrab »

Offline R

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Re: Proxies, Please Explain To Shareholders Your Plans For Recollateralization
« Reply #12 on: January 04, 2019, 02:22:26 pm »
Isn't 'recolatteralization' more the responsibility of the committee (since they're the asset owner) and traders (since they can bid on collateral & buy BTS on external exchanges) rather than witnesses? I don't want fake price feeds, stick to the BSIP-0018 recovery process.

Offline FractalNode

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Re: Proxies, Please Explain To Shareholders Your Plans For Recollateralization
« Reply #13 on: January 04, 2019, 05:05:40 pm »
I think that the modification of the settlement option could be helpful in keeping the price of bitCNY from the bottom. Then the settlement could buy everything between the market price and the feed price for 24 hours, with dynamic buy feed price (same way as "Margin Call Price" sells BTS) If the whole order of the Settle would not be done within 24h, then the rest would have done according to the current method.
The settlement option reduces the amount of bitAssets, and this is not good. It's better to let the owner change on the market if he offers a better price.

this solution would give as 3 benefits:
1. provides additional buy pressure up to the feed price level
2. prevents the capitalization of bitAssets from shrinking
3. if the amount of settlement is small, the user would not have to wait 24 hours, Settlement could be instant.

in other words, Settlement could behave same as margin call but in opposite direction for 24h. After this time, all the rest would settle according to the current method.
« Last Edit: January 04, 2019, 07:09:04 pm by FractalNode »