Author Topic: Developing a bitAsset research program  (Read 2443 times)

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Offline biophil

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Developing a bitAsset research program
« on: April 26, 2019, 10:16:32 pm »
Greetings, BitShares community!

My name is Philip Brown, and I'm a professor of Computer Science at the University of Colorado, Colorado Springs; here is my academic website: http://cs.uccs.edu/~pbrown2/index.html. It's been a long time since I was active around here; so let me give you a quick re-introduction.

I first started exploring the blockchain/cryptocurrency space in late 2013, and stumbled onto bitsharestalk.org because I was intrigued by one of the early Larimer essays about Contract-for-Difference-based stabilized assets. Back then, I was a PhD student studying game theory, incentive design, and feedback control systems, and I saw immediate connections between the concepts I was learning in my program and the things being created in the BitShares world. I was a PTS/AGS holder and early tester of the bitAsset systems, and have been watching and at times participating ever since. At the time, I would have loved to sink my teeth into some deep analysis of the incentive mechanisms in the system. I managed to find time to help write an early FAQ for Bitshares, and I operated a custom trading bot on BTER and the BitShares Dex for a short time, but the demands of my PhD program commanded my attention and I had little choice but to dabble. Fortunately, since then, I graduated with my PhD and am now a professor myself – which means that I get to choose exactly what I want to research.

Today, I'm very happy to announce that I am working towards launching a bitAsset-focused research project! Over the past several months, I've been in conversation with the BitShares Core Team regarding a partnership between my research lab and the BitShares DAC. We're discussing a collaborative project in which I'll direct a PhD student in an in-depth study of the key design tradeoffs in price-stable cryptocurrency systems, beginning with a comprehensive audit and analysis of the BitShares MPA system. I'm very excited to bring my expertise in game theory and incentive mechanisms to bear on these fundamental challenges, and I look forward to a productive collaboration as this unfolds.

More details will follow as the partnership progresses, but I wanted to post this here now by way of announcement and re-introduction. I'm happy to be back!
Support our research efforts to improve BitAsset price-pegging! Vote for worker 1.14.204 "201907-uccs-research-project."

Offline binggo

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Re: Developing a bitAsset research program
« Reply #1 on: April 26, 2019, 11:43:18 pm »
 :)

Offline pc

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Re: Developing a bitAsset research program
« Reply #2 on: April 27, 2019, 08:03:05 am »
Welcome back! :-)
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Offline xeroc

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Re: Developing a bitAsset research program
« Reply #3 on: April 27, 2019, 01:46:29 pm »
Ahhh .. Philip Brown = biophil
Thanks for making that connection.

Really looking forward to your project!
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Offline abit

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Re: Developing a bitAsset research program
« Reply #4 on: April 28, 2019, 10:59:05 am »
Welcome back and thanks for the offer.

The only thing that concerns me is it seems that you don't have a clear economy-related background, so possibly an average Joe (who don't understand computer science nor game theory nor economy) won't believe you nor your research results. (I guess) the majority of voting BitShares stake is in the hands of average Joes which are hard to educate. To develop the community/ecosystem, we've chosen a hard path. You may want to research topics about the voting mechanism as well.

When talking about economy, bitAsset is impacted by the impossible trinity theory. More discussions are linked below:
https://bitsharestalk.org/index.php?topic=27203.msg322852#msg322852
https://bitsharestalk.org/index.php?topic=11946.0
Looking forward to your inputs about this.
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Offline ripplexiaoshan

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Re: Developing a bitAsset research program
« Reply #5 on: April 28, 2019, 02:25:38 pm »
Good to see you are preparing to do deep research on bitAsset, it is very necessary indeed. However, is there any specific target?  or we can we expect from your future research?
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Offline JohnR

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Re: Developing a bitAsset research program
« Reply #6 on: April 28, 2019, 09:54:46 pm »
Thanks for the post and thoughtful proposal. Academic/institutional peer review is important for BitShares development credibility.

I also echo abit and ripplexiaoshan - there is abundant arm-chair economic analysis surrounding bitassets now - where would you focus your work specifically?

Also "Doc Brown", not lost on me.

Offline Customminer

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Re: Developing a bitAsset research program
« Reply #7 on: April 29, 2019, 12:08:01 am »
Will 'privatized' mpa (non committee owned smartcoins) be in scope? Or just normal FIAT pegged MPA?

Offline sahkan

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Re: Developing a bitAsset research program
« Reply #8 on: April 29, 2019, 01:00:43 am »
Looking forward to your work!

Offline bitProfessor

Re: Developing a bitAsset research program
« Reply #9 on: April 29, 2019, 06:14:01 am »
Welcome home。

Offline axismoto

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Re: Developing a bitAsset research program
« Reply #10 on: April 29, 2019, 10:17:47 pm »
This is awesome.  On a similar note, I have been research myself into this regarding the evolution of Bitshares from when the peg first broke in 2014 August.  Can someone point out or know by memory how the orgininal Bitshares X worked when the peg was first introduced?  I always felt that was the most viable model for stablecoins.  Not sure why Bytemaster went off of it.

Offline biophil

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Re: Developing a bitAsset research program
« Reply #11 on: April 30, 2019, 03:41:44 pm »
Thanks for the warm welcome back.

To answer a few questions:

The only thing that concerns me is it seems that you don't have a clear economy-related background, so possibly an average Joe (who don't understand computer science nor game theory nor economy) won't believe you nor your research results.

Messaging to average Joes is one of my favorite things to do -- check out my "Game Theory of Steem" series I published on Steemit a couple years back. As to my background, I actually do have training in economic thinking -- more than most computer science/engineering people, and one of my key research areas is developing algorithmic incentive mechanisms to influence human behavior. The topic of MPA/bitassets is fundamentally interdisciplinary, so anyone working on it needs access to a range of background material, and this is something I bring. In addition, the PhD student who will likely be working on the project is a software engineer with trading experience, so he brings some good relevant diversity as well.

When talking about economy, bitAsset is impacted by the impossible trinity theory. More discussions are linked below:
https://bitsharestalk.org/index.php?topic=27203.msg322852#msg322852
https://bitsharestalk.org/index.php?topic=11946.0
Looking forward to your inputs about this.

Yes, I'm aware of the impossible trinity and I'm looking forward to formalizing that kind of concept for bitassets in particular. More about my thoughts on this in the future.

Good to see you are preparing to do deep research on bitAsset, it is very necessary indeed. However, is there any specific target?  or we can we expect from your future research?

You can find a very brief summary of the project goals here. In a nutshell, we'll do two things:
  • We'll ask BTS-specific questions: How should MSSR be selected? Could dynamic collateral requirements be helpful? What is the right way to eliminate global settlement as an undercollateralization safety mechanism?
  • We'll ask broader price-stable-asset questions, focusing on the fundamental design tradeoffs in the space. My favorite question here concerns risk: there is a complex interplay between the behavior of bitasset shorts and the risk assumed by bitasset longs. The system can only work if the shorts assume most of the longs' risk, and yet in BTS bear markets, the shorts want to assume as little of that risk as possible. However, if the shorts offload the risk back to the longs, then the bitasset may un-peg and thus lose its value proposition, which in turn harms the value of BTS, ultimately hurting the shorts as well. Thus, the system must be designed so that this long-term risk is somehow directly "priced in" to the shorts' incentives.

Will 'privatized' mpa (non committee owned smartcoins) be in scope? Or just normal FIAT pegged MPA?

You're talking about ones like HERO and HERTZ? Insofar as they're governed by the same mechanisms that govern the committee-managed smartcoins, this project will talk about the private MPAs as well.

This is awesome.  On a similar note, I have been research myself into this regarding the evolution of Bitshares from when the peg first broke in 2014 August.  Can someone point out or know by memory how the orgininal Bitshares X worked when the peg was first introduced?  I always felt that was the most viable model for stablecoins.  Not sure why Bytemaster went off of it.

You're talking about the original oracle-free mechanism? I don't recall the specifics, but one of the reasons Dan abandoned it was that it allowed for large deviations from the peg which resulted directly from BTS price swings. In principle, those deviations would eventually correct themselves, but it wasn't meeting the goals of accurate price-pegging. There was certainly some controversy over the change and allegations that it wasn't fully tested.
Support our research efforts to improve BitAsset price-pegging! Vote for worker 1.14.204 "201907-uccs-research-project."

Offline Customminer

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Re: Developing a bitAsset research program
« Reply #12 on: April 30, 2019, 08:01:23 pm »
Will 'privatized' mpa (non committee owned smartcoins) be in scope? Or just normal FIAT pegged MPA?

You're talking about ones like HERO and HERTZ? Insofar as they're governed by the same mechanisms that govern the committee-managed smartcoins, this project will talk about the private MPAs as well.

Yeah I meant HERO & HERTZ, but also the Norns: https://github.com/BTS-CM/Norns
http://cryptofresh.com/a/URTHR
https://cryptofresh.com/a/SKULD
https://cryptofresh.com/a/VERTHANDI

I think there's great room for innovation with algorithm based asset on the Bitshares platform.

There's also the idea of using multiple assets as backing collateral for a single MPA: https://github.com/bitshares/bsips/issues/100

Offline biophil

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Re: Developing a bitAsset research program
« Reply #13 on: May 01, 2019, 03:22:30 am »
There's also the idea of using multiple assets as backing collateral for a single MPA: https://github.com/bitshares/bsips/issues/100

That might be more directly in the project's scope if it could plausibly introduce some stability benefits. I'll have to chew on it.
Support our research efforts to improve BitAsset price-pegging! Vote for worker 1.14.204 "201907-uccs-research-project."

Offline abit

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Re: Developing a bitAsset research program
« Reply #14 on: May 02, 2019, 04:01:24 pm »
Thanks for the warm welcome back.

To answer a few questions:

The only thing that concerns me is it seems that you don't have a clear economy-related background, so possibly an average Joe (who don't understand computer science nor game theory nor economy) won't believe you nor your research results.

Messaging to average Joes is one of my favorite things to do -- check out my "Game Theory of Steem" series I published on Steemit a couple years back. As to my background, I actually do have training in economic thinking -- more than most computer science/engineering people, and one of my key research areas is developing algorithmic incentive mechanisms to influence human behavior. The topic of MPA/bitassets is fundamentally interdisciplinary, so anyone working on it needs access to a range of background material, and this is something I bring. In addition, the PhD student who will likely be working on the project is a software engineer with trading experience, so he brings some good relevant diversity as well.

When talking about economy, bitAsset is impacted by the impossible trinity theory. More discussions are linked below:
https://bitsharestalk.org/index.php?topic=27203.msg322852#msg322852
https://bitsharestalk.org/index.php?topic=11946.0
Looking forward to your inputs about this.

Yes, I'm aware of the impossible trinity and I'm looking forward to formalizing that kind of concept for bitassets in particular. More about my thoughts on this in the future.

Good to see you are preparing to do deep research on bitAsset, it is very necessary indeed. However, is there any specific target?  or we can we expect from your future research?

You can find a very brief summary of the project goals here. In a nutshell, we'll do two things:
  • We'll ask BTS-specific questions: How should MSSR be selected? Could dynamic collateral requirements be helpful? What is the right way to eliminate global settlement as an undercollateralization safety mechanism?
  • We'll ask broader price-stable-asset questions, focusing on the fundamental design tradeoffs in the space. My favorite question here concerns risk: there is a complex interplay between the behavior of bitasset shorts and the risk assumed by bitasset longs. The system can only work if the shorts assume most of the longs' risk, and yet in BTS bear markets, the shorts want to assume as little of that risk as possible. However, if the shorts offload the risk back to the longs, then the bitasset may un-peg and thus lose its value proposition, which in turn harms the value of BTS, ultimately hurting the shorts as well. Thus, the system must be designed so that this long-term risk is somehow directly "priced in" to the shorts' incentives.


This sounds very interesting. You'll get my support. Looking forward to more outcome from your research. Do you have a schedule about the research, e.g. at what time you will publish what?
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