[Poll] BSIP59:Reduce MCR of bitCNY to 1.6

[binggo]

i don't think so, now the feed pirce is lower than CEX at regular price.

the try to add gateway fees to the feedprice to make margin called offers more expensiv than BTS offered on CEX at regular price

[Thul3]

The loose of peg comes from low liquidity and not by reducing MCR from 1.75 to 1.6.

https://www.dexbot.info/2019/05/21/understanding-trading-activity-and-potential-causes-of-bitasset-settlement/

If you reduce MCR from 1.75 to 1.6 it automaticly means you get now faster to MCR 1 in a bigger down movement.
Normaly it would be no problem since margin calls would get filled and the MCR pushed back to the minimal required MCR.

However with the current changes like MSSR 1.01 and the try to add gateway fees to the feedprice to make margin called offers more expensiv than BTS offered on CEX at regular price means that there will be no more margin be bought in a bigger down movement and the bad debt run through 1.6 to 1 without being pushed back by filled margin calls.


The risks of totaly losing the stable coins peg because of uncollateralized debt has been significantly increased.

[bench]

The loose of peg comes from low liquidity and not by reducing MCR from 1.75 to 1.6.

https://www.dexbot.info/2019/05/21/understanding-trading-activity-and-potential-causes-of-bitasset-settlement/

[Thul3]

This is ridiculous, we should be encouraging people to take out better collateralised positions, not allow them to take out less collateralised positions.

why not? MAKER DAI had MCR=1.5.

Rule is rule, want to change? give a new rule.

We need to make the platform more attractive for people to borrow more bitAssets.
Reducing MCR from 1.75 to 1.6 was the right step.

Who is going to use a stablecoin which will lose its pegg in a mid seize down movement ?

Lowering the MCR is fine but lowering the MCR and working that no margin will be eaten anymore will only decrease the reputation of bitassets as stable coin.

[bench]

This is ridiculous, we should be encouraging people to take out better collateralised positions, not allow them to take out less collateralised positions.

why not? MAKER DAI had MCR=1.5.

Rule is rule, want to change? give a new rule.

We need to make the platform more attractive for people to borrow more bitAssets.
Reducing MCR from 1.75 to 1.6 was the right step.

[binggo]

This is ridiculous, we should be encouraging people to take out better collateralised positions, not allow them to take out less collateralised positions.

why not? MAKER DAI had MCR=1.5.

Rule is rule, want to change? give a new rule.

[Crypto Kong]

This is ridiculous, we should be encouraging people to take out better collateralised positions, not allow them to take out less collateralised positions.

[BunkerChainLabs-DataSecurityNode]

At what point would we be able to recognize the results of this change being effective?

Overall I support this, but would like to have some thoughts around monitoring and analysis of the change to determine if/when it has the desired outcome and if it will need further adjusting. Going down is going to be a lot easier than going up, just to forewarn.

Jonathan

[clockwork]

I share Thul's concern about a lower low but agree with Xerox's reasoning.

Main thing is making sure that margins are sold as we drop so I am keen to see some ideas around making sure that happens implemented.

A lower mcr should drop premiums, align Dex and cex price and thus ensure margins are being bought...however I am concerned about our reaction time via bsip if we need to raise it again

[binggo]

When do u think the right time to reduce MCR?

In arround 2 months.There are many indicators we will see a last final bigger downtrend (third bottom) before getting the real uptrend.
Reduce of MCR should only happen in real uptrend to avoid getting negative effects in a downtrend.

Agree,But the market is hard to predict and the right time is hard to grasp.

The settlement, we can use it to let the market to control themself.

The settlement offset, the settlement delay, the TARGET COLLATERAL RATIO to control the MCR，even set the MCR=1.5 or 1.35.

[bitProfessor]

When do u think the right time to reduce MCR?

In arround 2 months.There are many indicators we will see a last final bigger downtrend (third bottom) before getting the real uptrend.
Reduce of MCR should only happen in real uptrend to avoid getting negative effects in a downtrend.

Agree,But the market is hard to predict and the right time is hard to grasp.

[matle85]

I share Thul's concern about a lower low but agree with Xerox's reasoning.

Main thing is making sure that margins are sold as we drop so I am keen to see some ideas around making sure that happens implemented.

[xeroc]

In arround 2 months.There are many indicators we will see a last final bigger downtrend (third bottom) before getting the real uptrend.
Reduce of MCR should only happen in real uptrend to avoid getting negative effects in a downtrend.

Good reasoning. We should be careful, reputation of bitCNY is good lately and IMHO, a premium is much more acceptable than a GS.
However, Comparing bitCNY with other "stablecoin" projects, the biggest collateral requirement that you can find outside of bitshares is 1.5x from DAI - (while here, 1.6x is proposed).
Obviously, most "stablecoins" only have 1x (being backed by the underlying asset itself).

I do know that DAI is also struggling, but they don't have the instruments that we have (but others). Imho, we should allow an MCR to go as low as 1.6
But I would grant permission to witnesses to pick between 1.6 and 1.75 according to premiums instead of fixing it.

For that reason, I do support reduction of MCR to 1.6.

Hope people can understand my reasoning.

[Thul3]

When do u think the right time to reduce MCR?

In arround 2 months.There are many indicators we will see a last final bigger downtrend (third bottom) before getting the real uptrend.
Reduce of MCR should only happen in real uptrend to avoid getting negative effects in a downtrend.

[bitProfessor]

When do u think the right time to reduce MCR?

[Thul3]

I voted against the reduce of MCR not because that i'm in general against it but because i belive its not the right timing to currently reduce MCR from 1.75 to 1.6 .
Timing on reducing MCR is a very important part.

Example OMO fund.Would we have used the OMO fund at a later time it would have significantly supported the supply of bitassets and value of BTS.The ground idea of the OMO fund was/is good but executed on a wrong time which caused in the end more damage than support because of wrong timing.

[bitcrab]

frequently changing MCR will put the ecosystem into danger.

don't request witnesses to play the role of economists, this is financial system, not a toy of anyone.

parameters like MCR, MSSR, force settlement offset need not to change every day, just as Federal Reserve need not to adjust the interest rate every day.

if you guys like the "dynamic MCR" solution so much, I suggest you to test it in some small smartcoin like bitEUR, just leave safety space to bitCNY and bitUSD.

[fractalnode]

(...)
maybe we need to set a insurance fund of GS and use the TARGET COLLATERAL RATIO to handle the CR of 1.10, if the insurance fund of GS can't handle, then black swan protection, if the CR which 40% of the whole system debit is down to 1.10, then settle the bitasset.
(...)
thoughts?

IMO insurance fund is "unhealthy" and makes people more prone to risk because someone else will pay for their mistakes.
###

in the current market state, reducing the "MCR" from 1.75 to 1.6 is not so bad, but we must be able to react quickly to market situations. But first and foremost I think that controlling parameters through constantly new BSIP is not a good way. These parameters should be dealt with by Witnesses (MCR, MSSR) or by the Committe Mambers (Settlement offset). I do not agree with the opinion that they lack economic knowledge to do it. This game is quite simple and the rules of this game are well known to witnesses.

Witnesses can even increase the value of the MCR parameter because it is not fully known when the majority will be achieved. If only 1 or 2 changes this parameter, it announces changes and tells investors that maybe they should increase their CR, if not they will be margin called


Please, encourage witnesses you vote for to change parameters, that is their task and they should be more pro-active. At the moment only two of them have a different opinion.

[binggo]

To have stable coins in a highly dynamic environment, we need dynamic parameters to protect the environment and traders better.

In an oversold market lower MCR are needed to compensate the outflow of money and in an overbought market the higher MCR prevents from over collateralize the system.

We had a long way testing with 175% and BSIP42, and both failed. To improve the ecosystem I support the way/idea of @clockwork with dynamic parameters.
Having a constant MCR in a dynamic market brings more trouble, than benefits.

Having a dynamic parameters MCR in a dynamic market will bring more trouble, it's a disaster to the system.

i think we have learned some lessons from BSIP42, GS and other rule，but i found we didn't.

The high MCR, The high MSSR, dynamic MCR, dynamic MSSR, dynamic feed price, low settlement offset, the GS, all these were wrong thoughts，these can‘t solve anything，just destroy the market more quickly, more deep.

Additional safety features are needed to lower the MCR and help against price suppression.
With a auto settle function for holders with a MCR of 1 from the fee pool, we could avoid a GS. These BTS can be spent afterwards to pay the worker.

i agreed with this thought, it's have something in common with mine, maybe we need to set a insurance fund of GS and use the TARGET COLLATERAL RATIO to handle the CR of 1.10, if the insurance fund of GS can't handle, then black swan protection, if the CR which 40% of the whole system debit is down to 1.10, then settle the bitasset.


i have gived a way to solve some problems: use the settlement offset,

Make the settlement offset varied with CR;

The settlement can have the TARGET COLLATERAL RATIO.

1. CR below the MCR will get less settlement offset, e.g. if you CR is 1.7, you will have 0 settlement offset, if you CR is 1.6, you will have -0.5% settlement offset, the Minimum settlement offset is -2%.

the settlement Delay below MCR will be one hour or more less.

2. CR above the MCR will get more settlement offset, e.g. if you CR is 1.8, you will have 2% settlement offset, if you CR is 2.0,  you will have 3% settlement offset. the Maximum settlement offset is 6%.

the settlement Delay above MCR still be 24 hours.

thoughts?

[bench]

To have stable coins in a highly dynamic environment, we need dynamic parameters to protect the environment and traders better.

In an oversold market lower MCR are needed to compensate the outflow of money and in an overbought market the higher MCR prevents from over collateralize the system.

We had a long way testing with 175% and BSIP42, and both failed. To improve the ecosystem I support the way/idea of @clockwork with dynamic parameters.
Having a constant MCR in a dynamic market brings more trouble, than benefits.

Additional safety features are needed to lower the MCR and help against price suppression.
With a auto settle function for holders with a MCR of 1 from the fee pool, we could avoid a GS. These BTS can be spent afterwards to pay the worker.

[xeroc]

Arguable, DAI

* hasn't seen major bear market move like bitAssets did
* DAI us collateralized by ETH which has much higher market cap than BTS

Hence, I am not sure comparing only supply with DAI makes a lot of sense.

[jackingyang]

I will not support change MCR to 1.6 because it's very hard to decide which one is better.
this can't contribute too much to encourage supply, but increase big unstable to the market.
and it's even more bad in the future when you decide to increase MCR like from 1.6 to 1.7

Please support this change

[bitcrab]

I will not support change MCR to 1.6 because it's very hard to decide which one is better.
this can't contribute too much to encourage supply, but increase big unstable to the market.
and it's even more bad in the future when you decide to increase MCR like from 1.6 to 1.7

Change is always together with difficulty and risk, but BTS cannot be great without change.

And I believe changing MCR to 1.6 is a change with low risk, but will contribute obviously to the whole ecosystem.

DAI now has a market cap 10+ times of bitCNY. no one should be satisfied even if you have hundreds of millions of BTS.

Surely reducing MCR will contribute to encourage bitCNY supply, if I have 10M BTS, now I can borrow 1.8M bitCNY with CR=2.2, if MCR change to 1.6, I can borrow 1.95M bitCNY with CR=2.05, both CR has the same distance to MCR, in other word, same risk on margin calling.

Yes, 1.6 is more closer to GS, but there is still a big buffer, and BSIP58 is already active on bitCNY, in the worst black swan will not happen, but black swan protection will happen, which will not bring pain like black swan, but just cause some bitCNY devaluation and will restore soon, we have experienced this months ago.

Yes, it's more difficult to increase MCR, but that's also possible when the whole community reach strong consensus to do that, and this change is to 1.6, not much lower value like 1.2 or 1.3, in my view we do not need to change it back from 1.6 to 1.75 in long time.

As a reference, DAI has a MCR of 1.5.

I regret that you do not support this change as a whale.

I have no other choice, I'll try my best to lobby the whole community to win this change.

[alt]

I will not support change MCR to 1.6 because it's very hard to decide which one is better.
this can't contribute too much to encourage supply, but increase big unstable to the market.
and it's even more bad in the future when you decide to increase MCR like from 1.6 to 1.7

[binggo]

BSIP42 (which left MCR/MSSR unchanged and relied on a "fake" price) was a different story altogether.

I agree that changing MCR/MSSR often makes it hard to evaluate risk but at the same time , it's the ONLY way to fight discount/premium.

They were a same story, and you will find it out finally. We have talk about these in Chinese forum, they are same, BSIP42  not changed the feed price only, it also changed the MCR/MSSR from another point of view.

So changing MCR/MSSR often is another BSIP42, no different, and only MSSR affects premium a bit.

Let the Force Settlement offset change as the CR, it a way.

I know the end effect was almost the same. That's why we adopted that solution in the first place since we couldn't mess with MCR/MSSR directly.

My point about BSIP42 being a different story had to do with the way it was applied and the extremely slow response to trend changes

I don't think the wittness have the ability to do this, they are not the economist, they have poor showing in the BSIP42.

Just like said" Stable coins no longer become stable if witnesses change MCR/MSSR every minute or every hour."

If the futures market change the MCR/MSSR often, what will happen?

Don't focus on the MCR, let's check the Force Settlement offset, let it change as the CR, will a better way.

a) Dont even try and blame BSIP42 on the witnesses. It was forced upon them via BSIP, same way this MCR BSIP is about to be
b) Actually, a continuously variable MCR/MSSR is EXACTLY what would keep them extremely stable (let's ignore the maths behind it for a moment and whether witnesses are up to the task or not)...fact of the matter is that you can't keep it stable with FIXED params...it needs to follow the market)
c) Futures market is a different story altogether... Even those however actually evaluate variation margin daily (and this is in a much more controlled and less volatile environment than crypto) and move funds between the 2 sides

The wittnesses have a great deal of freedom in the BSIP 42, they can perform more professional.
i and some people have point out the problem asap, and can revise via BSIP 42，but no one want to discuss，espacally have so many chinese wittness，so what happen？

A continuously variable MCR/MSSR is the worest idea i think, and never keep the stablecoin extremely stable, just will let the market more worse and will less people will come in as the rule will not be a rule.

No coin can stable, eg. dollor, gold, oil, BTC...   stablecoin just extremely stable to itself, everyone want to control the exchange will be fail，so if we want the amateur wittness to control the exchange and to act as the Fed？en...

I don't want the wittness to disupt the market too much and too deep, they will be not only the players but also the referee, it will be very worse, it is centralization, not decentralization.

Futures market and the collateral, there isn't really much of a difference between them.

[bitcrab]

In my view, allowing witnesses to adjust MCR/MSSR freely is dangerous.

as reference, Maker DAI has a key parameter called intereste rate, it's their way to ensure the peg of DAI, as I know, adjusting of the rate is also done by a committee with voting, and do not happen frequently, normally once several months.

another reference is how frequently Fedral Reserve adjust interest rate.

we really need to change MCR/MSSR, but do not need to change them every day.

and we also have another parameter-force settlement offset, taking bitCNY as an example, the 2% force settlement offset can limit the bitCNY discount to be less than 2%, if we reduce MCR and MSSR to a enough low level, it can limit the premium under a value like 2%, it's a +-2% gap peg, fairly well, and we can surely refine the 3 parameters to make the gap even less.

frequently changing input not always lead to stable output, sometimes it may lead to unstable output.

and it's not a good idea to ask the witnesses to play the role of economists, smartcoin ecosystem should not be a game field.

[clockwork]

BSIP42 (which left MCR/MSSR unchanged and relied on a "fake" price) was a different story altogether.

I agree that changing MCR/MSSR often makes it hard to evaluate risk but at the same time , it's the ONLY way to fight discount/premium.

They were a same story, and you will find it out finally. We have talk about these in Chinese forum, they are same, BSIP42  not changed the feed price only, it also changed the MCR/MSSR from another point of view.

So changing MCR/MSSR often is another BSIP42, no different, and only MSSR affects premium a bit.

Let the Force Settlement offset change as the CR, it a way.

I know the end effect was almost the same. That's why we adopted that solution in the first place since we couldn't mess with MCR/MSSR directly.

My point about BSIP42 being a different story had to do with the way it was applied and the extremely slow response to trend changes

I don't think the wittness have the ability to do this, they are not the economist, they have poor showing in the BSIP42.

Just like said" Stable coins no longer become stable if witnesses change MCR/MSSR every minute or every hour."

If the futures market change the MCR/MSSR often, what will happen?

Don't focus on the MCR, let's check the Force Settlement offset, let it change as the CR, will a better way.

a) Dont even try and blame BSIP42 on the witnesses. It was forced upon them via BSIP, same way this MCR BSIP is about to be
b) Actually, a continuously variable MCR/MSSR is EXACTLY what would keep them extremely stable (let's ignore the maths behind it for a moment and whether witnesses are up to the task or not)...fact of the matter is that you can't keep it stable with FIXED params...it needs to follow the market)
c) Futures market is a different story altogether... Even those however actually evaluate variation margin daily (and this is in a much more controlled and less volatile environment than crypto) and move funds between the 2 sides

[binggo]

BSIP42 (which left MCR/MSSR unchanged and relied on a "fake" price) was a different story altogether.

I agree that changing MCR/MSSR often makes it hard to evaluate risk but at the same time , it's the ONLY way to fight discount/premium.

They were a same story, and you will find it out finally. We have talk about these in Chinese forum, they are same, BSIP42  not changed the feed price only, it also changed the MCR/MSSR from another point of view.

So changing MCR/MSSR often is another BSIP42, no different, and only MSSR affects premium a bit.

Let the Force Settlement offset change as the CR, it a way.

I know the end effect was almost the same. That's why we adopted that solution in the first place since we couldn't mess with MCR/MSSR directly.

My point about BSIP42 being a different story had to do with the way it was applied and the extremely slow response to trend changes

I don't think the wittness have the ability to do this, they are not the economist, they have poor showing in the BSIP42.

Just like said" Stable coins no longer become stable if witnesses change MCR/MSSR every minute or every hour."

If the futures market change the MCR/MSSR often, what will happen?

Don't focus on the MCR, let's check the Force Settlement offset, let it change as the CR, will a better way.

Leave the wittness alone, let they do what they should do，to feed a fair feed price is a very hard work already for them.

[clockwork]

BSIP42 (which left MCR/MSSR unchanged and relied on a "fake" price) was a different story altogether.

I agree that changing MCR/MSSR often makes it hard to evaluate risk but at the same time , it's the ONLY way to fight discount/premium.

They were a same story, and you will find it out finally. We have talk about these in Chinese forum, they are same, BSIP42  not changed the feed price only, it also changed the MCR/MSSR from another point of view.

So changing MCR/MSSR often is another BSIP42, no different, and only MSSR affects premium a bit.

Let the Force Settlement offset change as the CR, it a way.

I know the end effect was almost the same. That's why we adopted that solution in the first place since we couldn't mess with MCR/MSSR directly.

My point about BSIP42 being a different story had to do with the way it was applied and the extremely slow response to trend changes

[binggo]

BSIP42 (which left MCR/MSSR unchanged and relied on a "fake" price) was a different story altogether.

I agree that changing MCR/MSSR often makes it hard to evaluate risk but at the same time , it's the ONLY way to fight discount/premium.

They were a same story, and you will find it out finally. We have talk about these in Chinese forum, they are same, BSIP42  not changed the feed price only, it also changed the MCR/MSSR from another point of view.

So changing MCR/MSSR often is another BSIP42, no different, and only MSSR affects premium a bit.

Let the Force Settlement offset change as the CR, it a way.

[clockwork]

Stable coins no longer become stable if witnesses change MCR/MSSR every minute or every hour. Investors will feel very unsecure because the coin become very uncertain.

Thus I prefer the community propose BSIP to change MCR/MSSR, committee members announce it once it voted it and then witnesses implement it.

Agree with that.

Agree with that.

witnesses change MCR/MSSR every minute or every hour which like BSIP42, we have learned a lesson from BSIP 42.

BSIP42 (which left MCR/MSSR unchanged and relied on a "fake" price) was a different story altogether.

I agree that changing MCR/MSSR often makes it hard to evaluate risk but at the same time , it's the ONLY way to fight discount/premium.

We need to come up with a framework for it. Relying on BSIPs for every change HARDLY makes a difference as market changes much faster and could potentially leave us in a much worse state if market circumstances change quickly and MCR has gone low.

My suggestion originally was to allow witnesses to feed MCR/MSSR based on market conditions within a specified range. Thus if you stayed above that range you would always know where you stand (same as keeping your CR above 1.75 now).

Link to that very rough first implementation idea: https://bitsharestalk.org/index.php?topic=27360.msg324958#msg324958

[clockwork]

Stable coins no longer become stable if witnesses change MCR/MSSR every minute or every hour. Investors will feel very unsecure because the coin become very uncertain.

Thus I prefer the community propose BSIP to change MCR/MSSR, committee members announce it once it voted it and then witnesses implement it.

Agree with that.

Agree with that.

witnesses change MCR/MSSR every minute or every hour which like BSIP42, we have learned a lesson from BSIP 42.

BSIP42 (which left MCR/MSSR unchanged and relied on a "fake" price) was a different story altogether.

I agree that changing MCR/MSSR often makes it hard to evaluate risk but at the same time , it's the ONLY way to fight discount/premium.

We need to come up with a framework for it. Relying on BSIPs for every change HARDLY makes a difference as market changes much faster and could potentially leave us in a much worse state if market circumstances change quickly and MCR has gone low.

My suggestion originally was to allow witnesses to feed MCR/MSSR based on market conditions within a specified range. Thus if you stayed above that range you would always know where you stand (same as keeping your CR above 1.75 now).

[bitcrab]

Stable coins no longer become stable if witnesses change MCR/MSSR every minute or every hour. Investors will feel very unsecure because the coin become very uncertain.

Thus I prefer the community propose BSIP to change MCR/MSSR, committee members announce it once it voted it and then witnesses implement it.

this is what I think, if MCR/MSSR change frequently, it will bring much trouble/uncertainty to traders/smartcoin users on estimating the risk and making decision.

[binggo]

Stable coins no longer become stable if witnesses change MCR/MSSR every minute or every hour. Investors will feel very unsecure because the coin become very uncertain.

Thus I prefer the community propose BSIP to change MCR/MSSR, committee members announce it once it voted it and then witnesses implement it.

Agree with that.

Agree with that.

witnesses change MCR/MSSR every minute or every hour which like BSIP42, we have learned a lesson from BSIP 42.

[lin5464]

Stable coins no longer become stable if witnesses change MCR/MSSR every minute or every hour. Investors will feel very unsecure because the coin become very uncertain.

Thus I prefer the community propose BSIP to change MCR/MSSR, committee members announce it once it voted it and then witnesses implement it.

Agree with that.

[Bangzi]

Stable coins no longer become stable if witnesses change MCR/MSSR every minute or every hour. Investors will feel very unsecure because the coin become very uncertain.

Thus I prefer the community propose BSIP to change MCR/MSSR, committee members announce it once it voted it and then witnesses implement it.

[clockwork]

I would like to hear the witnesses' thoughts on this. Ultimately, its their job

personally i thought the WHOLE idea of the MCR fix was so that witnesses could set it as they see fit (not that I know how mind you...i gave a suggestion once but dont think others gave it much thought)

if we change it simultaneously by agreement at a specified time, it kinda defeats the purpose of the bug fix

[xeroc]

I would like to hear the witnesses' thoughts on this. Ultimately, its their job

[bitcrab]

Bitshares Core Release 3.0.0 fixed the MCR bug, the protocol update will happen at 23 APR 2019 14:02 UTC.

https://github.com/bitshares/bitshares-core/releases/tag/3.0.0

Based on BSIP59, https://github.com/bitshares/bsips/blob/master/bsip-0059.md, now 2 poll worker proposals have been created:

1.14.174   Poll - BSIP59 - Reduce MCR of bitCNY to 1.6
1.14.175   Poll - BSIP59 - Do Not Reduce MCR of bitCNY

Select 1.6 to vote base on following consideration:

1.bitCNY is still in obvious shortage and premium. a lower MCR will help to encourage supply and lessen the shorting power.
2.in community discussion, especially in Chinese community, 1.6 is a value that get most support.
3.as a reference, Maker DAI has a corresponding parameter and the current value is 1.5, to be cautious, to go to 1.6 at the first step is a better choice.

If the for worker finally win, the MCR will be modified only after the protocol update succeed.

Please vote according to your opinion.