Author Topic: suggestion on new OMO fund  (Read 1061 times)

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Offline bitcrab

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suggestion on new OMO fund
« on: August 15, 2019, 11:11:59 am »
More than 1 year ago, I have suggest a open market operation worker proposal and get it voted up, a fund get BTS from worker proposals has been built and operated for months, unfortunately, in the great bear market the fund experienced big failure, big amount of BTS were sold in low prices comparing to bought price due to margin call, the OMO failed to play the role of market stabilizer.

In early this year, I also have suggested to restart the OMO fund but get little support, However, currently, I feel even more necessary to restart the OMO operation, I understand that the failure in previous OMO will make me difficult to get sufficient support on doing so, anyway, I'd like to start a serious discussion on the possibility of restarting the OMO fund and reach consensus on the key setting of the new OMO fund, it's OK for me to be excluded out of the operation team. the important thing is to make the new OMO work well and can really help the ecosystem to grow.

why we need the New OMO fund? what's the mission of the New OMO fund?

In China in the past months, we can feel that investors kept on leaving BTS, as BTS behaved bad in market.

China community has suggested to repurchase and burn BTS, this process is ongoing, this reflected how eager the community want BTS price to go up, however, I don't think it's a good idea to burn the bought BTS, why don't we manage a debt position with the bought BTS and supply more smartcoin to the market?

Why don't we show to public that it's possible to manage a debt position well, especially with continuous income?

Recently cn-vote took an action to vote refund400k, this action make several big workers voted down and lose the income, either this action is good or bad, I understand why there is always high voice in China community to cancel some workers, BTS ecosystem is so weak at this moment and the selling pressure from workers always play a big role in pressing down the BTS price, we need to find ways to make BTS ecosystem more robust. 

Comparing to burning BTS, another way to support the ecosystem is to put more BTS into debt position and release more smartcoins to the public.


what shall we learn from previous OMO fund?

I admit that as the key organizer of the previous OMO fund I have some unfeasible idea at that moment, I have hoped that OMO can provide a strong sustain to BTS price, but the market told that no one can counter with extreme market trend, even you have hundreds of millions of BTS.

another key factor is that, at that moment, smartcoin rules is not robust enough to resist shorting attack. that's why I tried my best to push GS protection and MSSR&MCR reduction after the disaster.

now smartcoin is more rubust than before to resist shorting attack, although the GS protection still depend on witnesses' work.

what a strategy is suitable?

the fund will manage debt positions and focus on BTS/smartcoin trading.

at this moment, the fund need to focus on BTS/bitUSD trading.

two price are defined to differenciate the current market status.

price A: BTS is underestimated if price<A
price B: BTS is overestimated   if price>B

1.the debt position margin call price should be always less than GS price, otherwise, the incoming fund can only be used to increase the CR.
2.margin call price should always < A.
3.while price < A, it's not allowed to sell BTS.
4.while price > B, it's not allowed to buy BTS.

to get A & B at this moment.

first suppose that 0.2175CNY is the long term bottom price.

for underestimated price I'd like to define like this:

0.2175*MCR = 0.348 CNY.
in USD, it should be 0.0455USD

which means, if the price is underestimated, if you borrow with setting your margin call price < GS price, you have no worry for margin calling.

top price in the last 9 months is 0.5377CNY

overestimated price = 0.5377/1.05 = 0.512CNY, or 0.073USD.

A=0.0455USD, B=0.073USD

A&B can be adjusted in long run.

how to organize the operation team? will the operation team be paid?

I suggest to operate with a 2/3 or 3/5 multisig account, the members should be the ones who are trusted by the committee.

every quarter the fund will be calculated net worth based on BTS. 50% of the profit will be paid to the operation team.


threads of previous OMO fund:
https://bitsharestalk.org/index.php?topic=26072.0
https://bitsharestalk.org/index.php?topic=26107.0
https://bitsharestalk.org/index.php?topic=27790.0

relevant threads:
https://bitsharestalk.org/index.php?topic=27835.0
https://bitsharestalk.org/index.php?topic=28706.0
« Last Edit: September 01, 2019, 07:32:02 am by bitcrab »

Offline Customminer

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Re: suggestion on new OMO fund
« Reply #1 on: August 17, 2019, 02:58:33 pm »
Quote
Another key factor is that, at that moment, smartcoin rules is not robust enough to resist shorting attack.

Only bitassets which are pegged to external price references cannot resist 'shorting attacks'. Smartcoins like the Norns (https://norns.hertz.network/) are completely resistant to BTS' external price fluctuations. An OMO for them would be far less risky than one for BTS:CNY/USD, imo.
« Last Edit: August 17, 2019, 03:07:48 pm by Customminer »

Offline bitcrab

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Re: suggestion on new OMO fund
« Reply #2 on: September 01, 2019, 06:59:20 am »
2 workers are created for this suggestion, please vote according to your opinion.

1.14.213   Poll - Start New OMO fund
1.14.214   Poll - Do Not Start the New OMO fund

Offline pc

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Re: suggestion on new OMO fund
« Reply #3 on: September 01, 2019, 09:28:41 am »
Seriously? You're kicking workers in the butt who provide actual value, and at the same time you propose to throw millions of BTS out of the window, AGAIN?

the worker mechanism is just like a man to seek better life by selling blood.

yes, when he is strong and in good health, maybe there is no problem, but when he is seriously ill and is going to die, I don't think I can suggest him to sell blood without stop.
Bitcoin - Perspektive oder Risiko? ISBN 978-3-8442-6568-2 http://bitcoin.quisquis.de

Offline sschiessl

Re: suggestion on new OMO fund
« Reply #4 on: September 01, 2019, 09:40:33 am »
Seriously? You're kicking workers in the butt who provide actual value, and at the same time you propose to throw millions of BTS out of the window, AGAIN?

the worker mechanism is just like a man to seek better life by selling blood.

yes, when he is strong and in good health, maybe there is no problem, but when he is seriously ill and is going to die, I don't think I can suggest him to sell blood without stop.

In light of that I could suggest committee burns all existing funds, and OMO needs to obtain it's funding through a worker. I suppose that would not be constructive.

Can we be constructive towards all workers please?
« Last Edit: September 01, 2019, 09:44:12 am by sschiessl »

Offline Crypto Kong

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Re: suggestion on new OMO fund
« Reply #5 on: September 01, 2019, 09:47:53 am »
The commitee should absolutely burn the existing funds, settle any smartcoins held to lower the margin sell wall and send BTS back to reserve pool. If you want to try and restart OMO then do it through worker proposal.

The original OMO was a failed operation, a massive failure. The operation should have been shut down and funds returned, rather than being held onto in hope that a quick forum post and poll can allow you to convince yourself that you have authorization to reuse funds. Why should you be able to use community funds on the result of a poll when everyone else has to compete with Refund 400k worker?

Return existing funds and create a worker proposal with proper write up of strategy, a quick forum post is unacceptable. If you want to use community funds, you should expect to go through the same process as everyone else.

*To clarify, I understand that a poll is a worker but this is about reaching the funding threshold as required by worker proposals rather than just beating the opposing poll.
« Last Edit: September 01, 2019, 10:51:24 am by Crypto Kong »

Offline Thul3

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Re: suggestion on new OMO fund
« Reply #6 on: September 01, 2019, 09:53:31 am »
The commitee should absolutely burn the existing funds, settle any smartcoins held to lower the margin sell wall and send BTS back to reserve pool. If you want to try and restart OMO then do it through worker proposal.

This would be a waste.
I will open a worker tonight more complex to support BTS price.
However i think bitcrabs proposal is not good enough because you can put even a 10 million BTS buy wall on DEX which can be easily destroyed by lowering BTS price on CEX which will make that margin call's will eat the support wall quickly which he have seen in the past.

I prefered first to talk about it more with committee thats why i try to join there but it seems it's currently urgent so i will hurry up.

Offline Crypto Kong

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Re: suggestion on new OMO fund
« Reply #7 on: September 01, 2019, 10:03:13 am »
I am happy for existing funds to be re used if included in a worker proposal that gets voted in for a reasonable amount of time. Using a poll is unacceptable IMO.
« Last Edit: September 01, 2019, 11:27:03 am by Crypto Kong »

Online bitProfessor

Re: suggestion on new OMO fund
« Reply #8 on: September 01, 2019, 01:50:22 pm »
The commitee should absolutely burn the existing funds, settle any smartcoins held to lower the margin sell wall and send BTS back to reserve pool. If you want to try and restart OMO then do it through worker proposal.

This would be a waste.
I will open a worker tonight more complex to support BTS price.
However i think bitcrabs proposal is not good enough because you can put even a 10 million BTS buy wall on DEX which can be easily destroyed by lowering BTS price on CEX which will make that margin call's will eat the support wall quickly which he have seen in the past.

I prefered first to talk about it more with committee thats why i try to join there but it seems it's currently urgent so i will hurry up.
Can you talk about your idea?

Offline bitcrab

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Re: suggestion on new OMO fund
« Reply #9 on: September 01, 2019, 02:15:53 pm »
Seriously? You're kicking workers in the butt who provide actual value, and at the same time you propose to throw millions of BTS out of the window, AGAIN?

the worker mechanism is just like a man to seek better life by selling blood.

yes, when he is strong and in good health, maybe there is no problem, but when he is seriously ill and is going to die, I don't think I can suggest him to sell blood without stop.

please be aware that this is just a poll worker, not a worker that get BTS from the reserve pool, the plan is to use the accumulated BTS and smartcoin market fee in committee-account.

the BTS ecosystem is so weak that about 2M BTS dump can make a big fall in price, that's why I suggest to stop the workers temporarily.

my idea is that the OMO will help the ecosystem to recover, when the ecosystem return to be in good health, at least the price return to above 0.3CNY and the margin call orders in CNY and USD markets disappear, we can consider to recover the support to some important workers.
« Last Edit: September 01, 2019, 03:00:31 pm by bitcrab »

Offline Crypto Kong

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Re: suggestion on new OMO fund
« Reply #10 on: September 01, 2019, 03:50:45 pm »
Seriously? You're kicking workers in the butt who provide actual value, and at the same time you propose to throw millions of BTS out of the window, AGAIN?

the worker mechanism is just like a man to seek better life by selling blood.

yes, when he is strong and in good health, maybe there is no problem, but when he is seriously ill and is going to die, I don't think I can suggest him to sell blood without stop.

please be aware that this is just a poll worker, not a worker that get BTS from the reserve pool, the plan is to use the accumulated BTS and smartcoin market fee in committee-account.

the BTS ecosystem is so weak that about 2M BTS dump can make a big fall in price, that's why I suggest to stop the workers temporarily.

my idea is that the OMO will help the ecosystem to recover, when the ecosystem return to be in good health, at least the price return to above 0.3CNY and the margin call orders in CNY and USD markets disappear, we can consider to recover the support to some important workers.


Unfortunately you have zero credibility when it comes to market operations, you were warned by myself and various others about what would happen last time and now you want to restart them and do the same again? You will fail in your attempt to hold up prices and end up making the situation worse.

I look forward to seeing Thule's proposal so the community at least has an alternative to your terrible guidance.

In times like these many people have underwater positions and will try ANYTHING in order to save their asses, the community needs to realise that sometimes it is OK to do nothing, rather than rushing into another bitcrab mismanagement that hurts us even more.

Ever heard the expression, "the trend is your friend"? Well the trend is down, so any thoughts of buying BTS with community funds is betting against the trend, take that into consideration when you vote for bitcrab to open up margin long positions again.
« Last Edit: September 01, 2019, 03:54:34 pm by Crypto Kong »

Offline JohnR

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Re: suggestion on new OMO fund
« Reply #11 on: September 01, 2019, 07:48:57 pm »
I would like to offer @bitcrab the chance to make a clear case for the objective of the OMO.

People are skeptical because it lacks a clear vision. Is it to maintain liquidity? Is it to pump the price? Anyone with a basic economics understanding can make a market.

Bringing this up after workers voted out gives the appearance that our largest stakeholders care about price > growth. This is a way to guarantee BTS long term value decreases.

I would like to believe the voters have the best intentions at heart. But we can't just fire employees and say now is the time for pumping our bags. That is like Wells Fargo CEO getting mega bonus after axing staff. The exact opposite principles of a DAC.

Offline bitcrab

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Re: suggestion on new OMO fund
« Reply #12 on: September 03, 2019, 10:48:37 am »
I would like to offer @bitcrab the chance to make a clear case for the objective of the OMO.

People are skeptical because it lacks a clear vision. Is it to maintain liquidity? Is it to pump the price? Anyone with a basic economics understanding can make a market.

Bringing this up after workers voted out gives the appearance that our largest stakeholders care about price > growth. This is a way to guarantee BTS long term value decreases.

I would like to believe the voters have the best intentions at heart. But we can't just fire employees and say now is the time for pumping our bags. That is like Wells Fargo CEO getting mega bonus after axing staff. The exact opposite principles of a DAC.

committee are now continuously buying BTS with the accumulated market fees, and now there is more than 5M BTS in committee-account.

how to use these BTS? just leave them there? or burn them as someone suggested?

Why not mint smartcoins and release to the market? Can we find a way to maintain a debt position with enough safety margin?if we can, why not do that?

there is no working agreement between voters and worker proposal owners, every worker proposal owner should be aware that the worker may be voted down, I cannot suggest a man with serious illness to sell blood without stop.

If BTS price fall to zero, any worker will make no sense.
« Last Edit: September 03, 2019, 10:50:12 am by bitcrab »

Offline bench

Re: suggestion on new OMO fund
« Reply #13 on: September 03, 2019, 01:21:39 pm »
how to use these BTS? just leave them there? or burn them as someone suggested?

I think we should use the funds, to finance our important workers:
https://bitsharestalk.org/index.php?topic=29586.0

Lack of funds for important developments, is now the highest risk part. Because of the high refund400k worker vote, we need to take other options now.
« Last Edit: September 04, 2019, 12:08:41 am by bench »
Be part of the change and vote for the bitshares-vision proxy!

Offline bitcrab

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Re: suggestion on new OMO fund
« Reply #14 on: September 05, 2019, 04:12:45 pm »
The commitee should absolutely burn the existing funds, settle any smartcoins held to lower the margin sell wall and send BTS back to reserve pool. If you want to try and restart OMO then do it through worker proposal.

This would be a waste.
I will open a worker tonight more complex to support BTS price.
However i think bitcrabs proposal is not good enough because you can put even a 10 million BTS buy wall on DEX which can be easily destroyed by lowering BTS price on CEX which will make that margin call's will eat the support wall quickly which he have seen in the past.

I prefered first to talk about it more with committee thats why i try to join there but it seems it's currently urgent so i will hurry up.

right, burning is waste.

in the most conservative way, committee can buy back BTS when the price is low enough and sell BTS when the price is high enough, without any borrowing.

the point is not to sustain price using any buy wall, but to take in BTS liquidity when price is low and release BTS liquidity when price is high.