Author Topic: New BSIP - Margin Call Fee  (Read 379 times)

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Online bench

New BSIP - Margin Call Fee
« on: August 12, 2019, 10:21:46 am »
Problem
At the moment margin call fees are only present with the MSSR. The margin call doesn't pay any market fees, like regular selling on the bitAsset market.
The MSSR is a penalty, which does only benefit the buyer of the debt and not the BitShares ecosystem.

Solution
Introducing a 0.2% margin call fee for everyone and reducing the MSSR by 0.2% results in a effective fee of 0%.

Referral System
Including the margin call fee in the referral system does mostly support third parties or LTM and not the BTS price/demand in the first place. 
On the other side everyone should be equal on the margin call side.

To increase the house edge from 20% significant (@xeroc), without sabotage the referral system, we need to take here 100% to burn BTS.
Everything else does not have a real impact or makes much sense.


Steps for integration (bitCNY)

StageMSSRMC-feePenalty
01.010%1%
11.0090.1%1%
21.0080.2%1%


Steps for integration (bitUSD)

StageMSSRMC-feePenalty
01.020%2%
11.0190.1%2%
21.0180.2%2%



Conclusion
Not having a reasonable fee for margin call to burn BTS, is one of the biggest leak for BitShares ecosystem and should be changed as fast as possible.

Reducing MSSR and increasing MC-fee by the same amount has a neutral effect on the debt penalty.


Sources
https://github.com/bitshares/bsips/issues/164
« Last Edit: September 01, 2019, 01:19:23 am by bench »
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Re: New BSIP - Margin call fee
« Reply #1 on: August 12, 2019, 10:33:46 am »
I agree that margin call trading charge the same market fee(with also market fee sharing) as usual trading, disagree to charge additional "penalty fee" to shorters.

Online bench

Re: New BSIP - Margin call fee
« Reply #2 on: August 12, 2019, 10:43:48 am »
I agree that margin call trading charge the same market fee(with also market fee sharing) as usual trading, disagree to charge additional "penalty fee" to shorters.

If we charge 0.2% margin call fee and reduce MSSR by 0.1% the effective fee is still 0.1%, like the normal market fee. No additional penalty.
I don't see a reason to give the LTM a advantage on the margin call fee and reduce the income on the reserve pool.
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Re: New BSIP - Margin call fee
« Reply #3 on: August 12, 2019, 10:56:50 am »
I agree that margin call trading charge the same market fee(with also market fee sharing) as usual trading, disagree to charge additional "penalty fee" to shorters.

If we charge 0.2% margin call fee and reduce MSSR by 0.1% the effective fee is still 0.1%, like the normal market fee. No additional penalty.
I don't see a reason to give the LTM a advantage on the margin call fee and reduce the income on the reserve pool.

difference, your 0.2% solution means the seller paid additional 0.1% fee to issuer.

Online bench

Re: New BSIP - Margin call fee
« Reply #4 on: August 12, 2019, 11:01:17 am »
I agree that margin call trading charge the same market fee(with also market fee sharing) as usual trading, disagree to charge additional "penalty fee" to shorters.

If we charge 0.2% margin call fee and reduce MSSR by 0.1% the effective fee is still 0.1%, like the normal market fee. No additional penalty.
I don't see a reason to give the LTM a advantage on the margin call fee and reduce the income on the reserve pool.

difference, your 0.2% solution means the seller paid additional 0.1% fee to issuer.

You are right, if we don't change MSSR. Reducing MSSR by 0.1%, the seller does only pay 0.1% extra.
« Last Edit: August 12, 2019, 11:05:08 am by bench »
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Re: New BSIP - Margin call fee
« Reply #5 on: August 12, 2019, 11:08:43 am »
not reducing MSSR, you should increase MSSR by 0.1%, which means the seller will sell BTS 0.1% cheaper than should be.

just like setting MSSR = 1.1, then charge 9% to margin call order buyers, you can also say you do not charge the seller, but you make the market very different with MSSR=1.01 and no fees.

Online bench

Re: New BSIP - Margin call fee
« Reply #6 on: August 12, 2019, 11:52:53 am »
not reducing MSSR, you should increase MSSR by 0.1%, which means the seller will sell BTS 0.1% cheaper than should be.

just like setting MSSR = 1.1, then charge 9% to margin call order buyers, you can also say you do not charge the seller, but you make the market very different with MSSR=1.01 and no fees.
You are against to decrease MSSR by 0.1% ?

When MSSR = 1.1 + 9% margin call fee, the result is an a effective MSSR of 1.19. This is not what I intended.
Increasing MSSR and margin call fee doesn't work.

Decreasing MSSR and increasing margin call fee is neutral to the margin call position, from the penalty perspective.
« Last Edit: August 12, 2019, 11:59:46 am by bench »
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Re: New BSIP - Margin call fee
« Reply #7 on: August 13, 2019, 04:50:31 pm »
Rewrote Referral System topic and list Steps for integration in two stages.

The integration in two stages ensures the margin call fee has no negative impact on the market.
« Last Edit: August 13, 2019, 05:15:14 pm by bench »
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