Author Topic: New BSIP:GS protection via core code  (Read 3063 times)

0 Members and 1 Guest are viewing this topic.

Offline sahkan

  • Sr. Member
  • ****
  • Posts: 229
    • View Profile
    • BitShares DEX
Re: New BSIP:GS protection via core code
« Reply #15 on: July 19, 2019, 01:26:18 pm »
The market will run as your thought? en,that's very interesting.

How about we just increase MSSR to to least 5%? Margin calls will be bought before GS happens. If you continue to 100% protect the debt holders GS events will happen all the time.

If you settle the under collateralized positions to smart coin owners that's just stealing from them and goes against DEX rules.

GS happens because of 1 thing:
1. debt positions don't adjust debt

To correct that DEX should:
1. Margin call their position with enough incentive for the position to be liquidated (MSSR), the margin call should be such that debt holder would want to adjust their debt or close it.

Shifting risk to the DEX, smart coin holders or anyone else is just not a good business practice.

But you are most likely a debt holder so you probably want others to pay for the risk you took and lost. When BTS goes up I don't see any debt holders creating GS funds, they just want to use other people's money to cover their risk. And that's the gist of it. The sad part is that by seeing only your way, you fail to notice that BTS continues to slide because of people's mistrust and bad practices.


Offline abit

  • Committee member
  • Hero Member
  • *
  • Posts: 3811
    • View Profile
    • Steemit Blog
  • BitShares: abit
  • GitHub: abitmore
Re: New BSIP:GS protection via core code
« Reply #16 on: July 19, 2019, 01:29:41 pm »
The market will run as your thought? en,that's very interesting.

How about we just increase MSSR to to least 5%? Margin calls will be bought before GS happens. If you continue to 100% protect the debt holders GS events will happen all the time.

If you settle the under collateralized positions to smart coin owners that's just stealing from them and goes against DEX rules.

GS happens because of 1 thing:
1. debt positions don't adjust debt

To correct that DEX should:
1. Margin call their position with enough incentive for the position to be liquidated (MSSR), the margin call should be such that debt holder would want to adjust their debt or close it.

Shifting risk to the DEX, smart coin holders or anyone else is just not a good business practice.

But you are most likely a debt holder so you probably want others to pay for the risk you took and lost. When BTS goes up I don't see any debt holders creating GS funds, they just want to use other people's money to cover their risk. And that's the gist of it. The sad part is that by seeing only your way, you fail to notice that BTS continues to slide because of people's mistrust and bad practices.
Too many wrong assumptions in your comment.

I'd say please understand the situation before starting to argue on something.
BTS account: abit
BTS committee member: abit
BTS witness: in.abit

Offline sahkan

  • Sr. Member
  • ****
  • Posts: 229
    • View Profile
    • BitShares DEX
Re: New BSIP:GS protection via core code
« Reply #17 on: July 19, 2019, 01:30:15 pm »

The word "settle" is used in too many places but means different things.


I was referring to "Force Settlement" and the idea that the first person that settles bad debt gets less BTS.

Offline sahkan

  • Sr. Member
  • ****
  • Posts: 229
    • View Profile
    • BitShares DEX
Re: New BSIP:GS protection via core code
« Reply #18 on: July 19, 2019, 01:31:44 pm »
@abit I am not arguing, just stating my thoughts.

Offline abit

  • Committee member
  • Hero Member
  • *
  • Posts: 3811
    • View Profile
    • Steemit Blog
  • BitShares: abit
  • GitHub: abitmore
Re: New BSIP:GS protection via core code
« Reply #19 on: July 19, 2019, 01:33:37 pm »

The word "settle" is used in too many places but means different things.


I was referring to "Force Settlement" and the idea that the first person that settles bad debt gets less BTS.
Current rule aka GS means everyone who settles bad debt gets less BTS.
BTS account: abit
BTS committee member: abit
BTS witness: in.abit

Offline sahkan

  • Sr. Member
  • ****
  • Posts: 229
    • View Profile
    • BitShares DEX
Re: New BSIP:GS protection via core code
« Reply #20 on: July 19, 2019, 01:41:37 pm »

The word "settle" is used in too many places but means different things.


I was referring to "Force Settlement" and the idea that the first person that settles bad debt gets less BTS.
Current rule aka GS means everyone who settles bad debt gets less BTS.

Yes, and that's bad business. And how about if we introduce a 24hr debt settlement where the debt holder gets a chance to close his debt before GS?

Offline abit

  • Committee member
  • Hero Member
  • *
  • Posts: 3811
    • View Profile
    • Steemit Blog
  • BitShares: abit
  • GitHub: abitmore
Re: New BSIP:GS protection via core code
« Reply #21 on: July 19, 2019, 01:55:46 pm »
The market will run as your thought? en,that's very interesting.

How about we just increase MSSR to to least 5%? Margin calls will be bought before GS happens. If you continue to 100% protect the debt holders GS events will happen all the time.

If you settle the under collateralized positions to smart coin owners that's just stealing from them and goes against DEX rules.

GS happens because of 1 thing:
1. debt positions don't adjust debt

It's that undercollateralization happens ..., not GS happens .... Whether to GS is what we're discussing, aka whether to change the rule.

Quote

To correct that DEX should:
1. Margin call their position with enough incentive for the position to be liquidated (MSSR), the margin call should be such that debt holder would want to adjust their debt or close it.

We didn't find the way so far, as you can see, changing MSSR didn't work.

You think they "should" do it, but they didn't do it. It means you are wrong, but not them.


Simply, collateralized debt means if you can't pay the debt, you lose the collateral, but nothing more.
When undercollateralization happens, the debt position holder is already prepared to lose the whole collateral.
It's not justice to ask debt position holders to put more funds into the collateral, although they could, they don't have to.

We're on blockchain. Thus "anonymity and unnacountability. If you take margin anywhere outside crypto your liability is unlimited. It is not limited to your deposit. The brokers have your details and can and will pursue you through the courts. In cryoto your liability is limited to your deposit." (credit to Anthony Garner in Telegram BitShares Community Group)

Quote
Shifting risk to the DEX, smart coin holders or anyone else is just not a good business practice.

Think it in another way:
It's the debt asset holders' responsibility to settle before undercollateralization.
The debt asset holders are responsible to keep value of collateral as high as possible, otherwise when they settle they can't get the full face value. It's simple, because settling for collateral is the only way to "redeem the value".

When you go into a position (borrow bitUSD or hold bitUSD) you bear some risks, although different risks for different parties. There is no such thing 100% safe. Current rule, aka GS, doesn't solve the issue.


Quote

But you are most likely a debt holder so you probably want others to pay for the risk you took and lost. When BTS goes up I don't see any debt holders creating GS funds, they just want to use other people's money to cover their risk. And that's the gist of it. The sad part is that by seeing only your way, you fail to notice that BTS continues to slide because of people's mistrust and bad practices.
BTS account: abit
BTS committee member: abit
BTS witness: in.abit

Offline abit

  • Committee member
  • Hero Member
  • *
  • Posts: 3811
    • View Profile
    • Steemit Blog
  • BitShares: abit
  • GitHub: abitmore
Re: New BSIP:GS protection via core code
« Reply #22 on: July 19, 2019, 01:58:54 pm »

The word "settle" is used in too many places but means different things.


I was referring to "Force Settlement" and the idea that the first person that settles bad debt gets less BTS.
Current rule aka GS means everyone who settles bad debt gets less BTS.

Yes, and that's bad business. And how about if we introduce a 24hr debt settlement where the debt holder gets a chance to close his debt before GS?
Before discussing your idea, how about you think about the 4 options I described?
It's better if you can explain what are the pros and cons first then ask others.

In your words you mentioned "debt holders", I guess you mean "debt position holders"?
When the debt positions turned into margin calls, the debt position holders are already willing to close their positions. It's that nobody buys into the margin calls caused the final undercollateralization. It's the debt asset holders' fault.

When it's already undercollateralized, what's the use of the 24 hours? Assume some debt asset holders will settle, what's the fair price? where to get the collateral to pay them? You still need to face the fact: whether first settler will get less.
« Last Edit: July 19, 2019, 02:07:42 pm by abit »
BTS account: abit
BTS committee member: abit
BTS witness: in.abit

Offline bitcrab

  • Committee member
  • Hero Member
  • *
  • Posts: 1633
    • View Profile
  • BitShares: bitcrab
  • GitHub: bitcrab
Re: New BSIP:GS protection via core code
« Reply #23 on: July 19, 2019, 02:08:28 pm »
I'm for the 4th option now:
* allow undercollateralization
* no globally settlement
* has individual settlement, the system take over the undercollateralized debt positions (which would form a pool)
* when undercollateralization happens and someone tries to settle, fill the settlement request with the positions with lowest CR (can be the pool) first, so first settler will get less

so the pool as a debt position may have CR<1, when some tries to settle, how can the pool fulfill the request with CR<1? or the pool can only fulfill the request with CR>1?

Offline sahkan

  • Sr. Member
  • ****
  • Posts: 229
    • View Profile
    • BitShares DEX
Re: New BSIP:GS protection via core code
« Reply #24 on: July 19, 2019, 02:14:47 pm »

The word "settle" is used in too many places but means different things.


I was referring to "Force Settlement" and the idea that the first person that settles bad debt gets less BTS.
Current rule aka GS means everyone who settles bad debt gets less BTS.

Yes, and that's bad business. And how about if we introduce a 24hr debt settlement where the debt holder gets a chance to close his debt before GS?
Before discussing your idea, how about you think about the 4 options I described?
It's better if you can explain what are the pros and cons first then ask others.

In your words you mentioned "debt holders", I guess you mean "debt position holders"?
When the debt positions turned into margin calls, the debt position holders are already willing to close their positions. It's that nobody buys into the margin calls caused the final undercollateralization. It's the debt asset holders' fault.

When it's already undercollateralized, what's the use of the 24 hours? Assume some debt asset holders will settle, what's the fair price? where to get the collateral to pay them? You still need to face the fact: whether first settler will get less.
I am not here to argue your points. I simply state my thoughts. If we were to increase MCR and MSSR (tools we already have) we might be able to avoid GS or "GS protection". That's my point. You think otherwise and that's ok, we are all entitled to our opinions.

Offline abit

  • Committee member
  • Hero Member
  • *
  • Posts: 3811
    • View Profile
    • Steemit Blog
  • BitShares: abit
  • GitHub: abitmore
Re: New BSIP:GS protection via core code
« Reply #25 on: July 19, 2019, 02:20:00 pm »
I'm for the 4th option now:
* allow undercollateralization
* no globally settlement
* has individual settlement, the system take over the undercollateralized debt positions (which would form a pool)
* when undercollateralization happens and someone tries to settle, fill the settlement request with the positions with lowest CR (can be the pool) first, so first settler will get less

so the pool as a debt position may have CR<1, when some tries to settle, how can the pool fulfill the request with CR<1? or the pool can only fulfill the request with CR>1?
The pool pays less BTS per bitUSD.
BTS account: abit
BTS committee member: abit
BTS witness: in.abit

Offline bitcrab

  • Committee member
  • Hero Member
  • *
  • Posts: 1633
    • View Profile
  • BitShares: bitcrab
  • GitHub: bitcrab
Re: New BSIP:GS protection via core code
« Reply #26 on: July 19, 2019, 02:30:48 pm »
I'm for the 4th option now:
* allow undercollateralization
* no globally settlement
* has individual settlement, the system take over the undercollateralized debt positions (which would form a pool)
* when undercollateralization happens and someone tries to settle, fill the settlement request with the positions with lowest CR (can be the pool) first, so first settler will get less

so the pool as a debt position may have CR<1, when some tries to settle, how can the pool fulfill the request with CR<1? or the pool can only fulfill the request with CR>1?
The pool pays less BTS per bitUSD.

so when someone tries to settle,
the pool has a settle price of 0.05USD,
the margin call order price is 0.04USD,
the normal force settlement price is 0.043USD

which will fill the settle request? the pool?

Offline abit

  • Committee member
  • Hero Member
  • *
  • Posts: 3811
    • View Profile
    • Steemit Blog
  • BitShares: abit
  • GitHub: abitmore
Re: New BSIP:GS protection via core code
« Reply #27 on: July 19, 2019, 02:35:18 pm »

The word "settle" is used in too many places but means different things.


I was referring to "Force Settlement" and the idea that the first person that settles bad debt gets less BTS.
Current rule aka GS means everyone who settles bad debt gets less BTS.

Yes, and that's bad business. And how about if we introduce a 24hr debt settlement where the debt holder gets a chance to close his debt before GS?
Before discussing your idea, how about you think about the 4 options I described?
It's better if you can explain what are the pros and cons first then ask others.

In your words you mentioned "debt holders", I guess you mean "debt position holders"?
When the debt positions turned into margin calls, the debt position holders are already willing to close their positions. It's that nobody buys into the margin calls caused the final undercollateralization. It's the debt asset holders' fault.

When it's already undercollateralized, what's the use of the 24 hours? Assume some debt asset holders will settle, what's the fair price? where to get the collateral to pay them? You still need to face the fact: whether first settler will get less.
I am not here to argue your points. I simply state my thoughts. If we were to increase MCR and MSSR (tools we already have) we might be able to avoid GS or "GS protection". That's my point. You think otherwise and that's ok, we are all entitled to our opinions.
Increasing MCR may probably reduce chance of undercollateralization, however, it may probably lead to the opposite as well.

With increased MCR, less bitUSD can be produced with same amount of BTS as collateral. Higher MSSR means debt position holders will lose more when being margin called, it means higher risks for debt pisition holders. So it will lead to lower bitUSD supply, poorer liquidity, and likely higher premium.

If we want to grow, we need to bear some risks.

Take bitEUR as an example. Its overall collateral ratio is very "healthy", but it has too little supply.
BTS account: abit
BTS committee member: abit
BTS witness: in.abit

Offline abit

  • Committee member
  • Hero Member
  • *
  • Posts: 3811
    • View Profile
    • Steemit Blog
  • BitShares: abit
  • GitHub: abitmore
Re: New BSIP:GS protection via core code
« Reply #28 on: July 19, 2019, 02:37:39 pm »
I'm for the 4th option now:
* allow undercollateralization
* no globally settlement
* has individual settlement, the system take over the undercollateralized debt positions (which would form a pool)
* when undercollateralization happens and someone tries to settle, fill the settlement request with the positions with lowest CR (can be the pool) first, so first settler will get less

so the pool as a debt position may have CR<1, when some tries to settle, how can the pool fulfill the request with CR<1? or the pool can only fulfill the request with CR>1?
The pool pays less BTS per bitUSD.

so when someone tries to settle,
the pool has a settle price of 0.05USD,
the margin call order price is 0.04USD,
the normal force settlement price is 0.043USD

which will fill the settle request? the pool?
Compare CR of the pool and the call order, whose CR is lower gets settled.

If CR of the order or pool > 1 / (1+force_settle_offset), fill settle order at normal force settlement price,
if CR of the order or pool < 1 / (1+force_settle_offset), fill settle order at CR.
« Last Edit: July 19, 2019, 02:40:28 pm by abit »
BTS account: abit
BTS committee member: abit
BTS witness: in.abit

Offline bitcrab

  • Committee member
  • Hero Member
  • *
  • Posts: 1633
    • View Profile
  • BitShares: bitcrab
  • GitHub: bitcrab
Re: New BSIP:GS protection via core code
« Reply #29 on: July 19, 2019, 02:54:00 pm »
I'm for the 4th option now:
* allow undercollateralization
* no globally settlement
* has individual settlement, the system take over the undercollateralized debt positions (which would form a pool)
* when undercollateralization happens and someone tries to settle, fill the settlement request with the positions with lowest CR (can be the pool) first, so first settler will get less

so the pool as a debt position may have CR<1, when some tries to settle, how can the pool fulfill the request with CR<1? or the pool can only fulfill the request with CR>1?
The pool pays less BTS per bitUSD.

so when someone tries to settle,
the pool has a settle price of 0.05USD,
the margin call order price is 0.04USD,
the normal force settlement price is 0.043USD

which will fill the settle request? the pool?
Compare CR of the pool and the call order, whose CR is lower gets settled.

If CR of the order or pool > 1 / (1+force_settle_offset), fill settle order at normal force settlement price,
if CR of the order or pool < 1 / (1+force_settle_offset), fill settle order at CR.

so in my above example, obviously the pool has lower CR and will be settled with price 0.05USD.

maybe at the time the feed price is 0.042(not exact), but when user settle, they have to settle the pool with price 0.05, not the margin call order with price 0.04?

you tell the people the price is 0.042, but you only allow them to settle at 0.5...confusion...