Author Topic: Discussion for the market making contest, stage two  (Read 740 times)

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Discussion for the market making contest, stage two
« on: November 08, 2019, 01:04:26 pm »
With the first stage of MM contest, we've gained some market depth in the BTS/BTC and BTS/USDT pair. As of writing, the depths of those markets in the BitShares DEX are deeper than top centralized exchanges like Binance, Huobi and Poloniex. Although due to low trading volume which indicates a lack of trading activities, our market depth hasn't been proven stable, it's still a foundation for future improvements.

Admittedly, the hottest BTS market in the centralized exchanges is the BTS/QC pair on zb.com (https://trans.zb.com/markets/btsqc), although the reported volume is somewhat fake. QC is an asset targeting being pegged to CNY, no matter how it's implemented. That means the Chinese traders are the most active parties trading BTS. Actually the market depth of BTS/QC was not very good, at least at the last time when I checked.

The second stage of MM contest aims to build up a new BTS/CNY market in the BitShares DEX, to attract Chinese traders to trade in the DEX. Note: bitCNY is not an option since it's a direct derivative of BTS and the BTS/bitCNY market already has quite some liquidity.

Some options I've considered:
1. CNC. CNC is an IOU asset issued by AEX in BitShares, pegged to CNY, claimed to be backed by sufficient amount of real assets. It's a direct competitor of ZB's QC in the crypto world. Since it's based on BitShares, we have a good reason to support it. On the other hand, AEX still need to show us the proof that it's fully backed.
2. GCNY. GCNY is a market-pegged asset with GDEX.BTC as collateral, created by the GDEX team. The team has ever proposed to transfer the asset to the committee. GDEX has a proof that GDEX.BTC is fully backed, thus GCNY is somewhat trustworthy.
3. A new asset backed by a USDT gateway asset. It's perceived that traders have greater interest in trading in BTS/USDT pair than trading BTS/BTC pair, thus an asset backed by USDT makes more sense. In addition, the exchange rate of USDT/CNY is relatively stable, so it's less risky for traders to create/borrow CNY by putting some USDT as collateral, that means it's easier to bootstrap the BTS/CNY market.

Thoughts?

P.S. I know there are risks related to IOUs, however not taking risks means no progress.
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Offline binggo

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Re: Discussion for the market making contest, stage two
« Reply #1 on: November 08, 2019, 10:41:21 pm »
USDT/BTS may be more suitable, people can get USDT more easier than CNC and GCNY, USDT has more Deposit Channel and more gateway trading pair.
Bitusd/usdt and bitcny/usdt is another withdraw channel.

Offline Crypto Kong

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Re: Discussion for the market making contest, stage two
« Reply #2 on: November 11, 2019, 10:06:50 am »
I would go down the USDT gateway route.

Offline Thul3

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Re: Discussion for the market making contest, stage two
« Reply #3 on: November 11, 2019, 12:06:53 pm »
I'm for bitUSD/USDT reducing the votality risk of the liquidity maker massivly and still opens a direct gate between DEX and CEX.

Offline clockwork

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Re: Discussion for the market making contest, stage two
« Reply #4 on: November 11, 2019, 01:14:41 pm »
think USDT too

Offline bts2best

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Re: Discussion for the market making contest, stage two
« Reply #5 on: November 11, 2019, 02:20:25 pm »
how about CNC/cny CNC/usd

Offline 白衣

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Re: Discussion for the market making contest, stage two
« Reply #6 on: November 11, 2019, 03:31:24 pm »
CNY:CNC  USD:USDT 
BTS:CNC  BTS:USDT


Online Nesh

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Re: Discussion for the market making contest, stage two
« Reply #7 on: November 14, 2019, 11:46:37 am »
Actually I would stay on the BTC and USDT route as it already has many participants and proved somewhat successful. But to increase not only liquidity but also actual trading volume, I would tune the reward ratio between buyers and sellers, e.g. to 95:5, maybe 90:10. As we have seen the 98:2 ratio resulted in activity on the buy side only. That way we generate liquidity on one side only which is not very inviting to improve the overall trading volume. By better rewarding the sell side we will likely see more sell orders which should naturally result in more trading volume, especially as both sides want to stay close to each other for a higher reward.
If anything I would add one of your proposed markets as a third one. Also, as you have pointed out the BTS:QC pair on ZB doesn't have that much liquidity, so I wouldn't trust their volume.

On another note, what happened with stage 1? Has it ended, i.e. no more rewards paid out for now? Unless I'm missing something the previous topic is gone and I can't find any information about its current state.
« Last Edit: November 14, 2019, 11:50:46 am by Nesh »

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Re: Discussion for the market making contest, stage two
« Reply #8 on: November 14, 2019, 11:57:13 am »
Another option is to wait for China's official DCEP. I expect that all major exchanges will add DCEP market when it's out.
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Re: Discussion for the market making contest, stage two
« Reply #9 on: November 14, 2019, 12:05:41 pm »
Actually I would stay on the BTC and USDT route as it already has many participants and proved somewhat successful. But to increase not only liquidity but also actual trading volume, I would tune the reward ratio between buyers and sellers, e.g. to 95:5, maybe 90:10. As we have seen the 98:2 ratio resulted in activity on the buy side only. That way we generate liquidity on one side only which is not very inviting to improve the overall trading volume. By better rewarding the sell side we will likely see more sell orders which should naturally result in more trading volume, especially as both sides want to stay close to each other for a higher reward.
Thanks for the suggestion, I'm also considering this.

Quote
If anything I would add one of your proposed markets as a third one. Also, as you have pointed out the BTS:QC pair on ZB doesn't have that much liquidity, so I wouldn't trust their volume.
If you're in Wechat groups you can find a significant percent of people are trading there, that's why I said it's hot.

Quote
On another note, what happened with stage 1? Has it ended, i.e. no more rewards paid out for now? Unless I'm missing something the previous topic is gone and I can't find any information about its current state.
It's still ongoing. I'm just thinking about extending the contest. To do it we may need to increase the total rewards or decrease rewards for current markets in the contest.
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Offline Dinko

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Re: Discussion for the market making contest, stage two
« Reply #10 on: November 14, 2019, 01:38:18 pm »
massive buying orders in dex and massive sell orders in cex. Who really profits from those market making contests? istn always gdex the winner or i am wrong
“The most unprofitable item ever manufactured is an excuse.”

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Re: Discussion for the market making contest, stage two
« Reply #11 on: November 14, 2019, 02:21:20 pm »
massive buying orders in dex and massive sell orders in cex. Who really profits from those market making contests? istn always gdex the winner or i am wrong
SPARKDEX and RUDEX are also in the contest.
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Online bitcrab

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Re: Discussion for the market making contest, stage two
« Reply #12 on: November 14, 2019, 02:27:16 pm »
in my view it is good, but not urgent to introduce CNY pair in the contest.

it's not difficult for traders from China to get USDT/BTC by paying CNY fiat, and USDT/BTC are accepted almost everywhere.

whether CNC/QC is suitable highly depend on the opinion of ZB and AEX, they need to estimate the legal risks for putting CNC/QC into use outside their own CEX.

what China traders need is a good OTC platform to connect DEX and fiat.

if BTS price can go above 0.22 CNY, bitCNY can be a good CNY channel, I think we can expect the day to come.

I agree to adjust reward ratio between buyers and sellers, because the current ratio incentivize traders to hold BTC/USDT, not BTS, this is a problem, and may be more obvious as time elapse.

maybe we can adjust the ratio to 9:1 and watch what will happen.


Offline Dinko

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Re: Discussion for the market making contest, stage two
« Reply #13 on: November 14, 2019, 07:02:15 pm »
nobody from normal users takes advantage of that.  volume has not increased during this run. buy X amount of BTS on DEX, sell X amount of BTS in CEX, transfer funds back to DEX = profit?
“The most unprofitable item ever manufactured is an excuse.”

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Re: Discussion for the market making contest, stage two
« Reply #14 on: November 15, 2019, 03:53:33 am »
nobody from normal users takes advantage of that.  volume has not increased during this run. buy X amount of BTS on DEX, sell X amount of BTS in CEX, transfer funds back to DEX = profit?

not true, the volume of BTS/GDEX.USDT and BTS/GDEX.BTC increased a lot.

the depth has reached to more than 10 BTC or 90K USDT, several times than before.

more funds come to DEX will make traders trade more in DEX, and make DEX the centre for BTS price determination, this will benefit the BTS ecosystem.