Author Topic: Design a "RSKM pool" to handle the bad debt  (Read 99 times)

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Offline binggo

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Design a "RSKM pool" to handle the bad debt
« on: May 27, 2020, 01:28:35 am »
https://github.com/bitshares/bsips/issues/275

Abstract

-RSKM pool
-Bad debt
-Stability bond
-BSIP74
-BSIP62
-Market fee of bitasset
-The Management account of bitasset

Motivation

The bitasset of BTS still didn't have a feasible mechanism to handle the black swan or bad debt.
BSIP18/BSIP71 lacks illogical and can break the credit of bitasset very easily.
We can check the bitbtc/bitgold/bitsilver which were all in the BSIP18.
The holders of biasset only have one choice to take care of their fund, this is very unhealthy to the ecology of bitasset and BTS.
So we need to design a more feasible mechanism to handle the black swan or bad debt, give more choices to the holders of bitasset.

Rational

The market of bitasset have many sustainable revenue to deal with the bad debt and can use the sustainable revenue to buy-back the bond in extreme cases.

The holder of bitasset have three choices to take care of their bitasset:
1.BUY bts in the market;
2.BUY bond;
3.Suffer the devalue;

NO BSIP18, NO BSIP76, NO BSIP71,NO BSIP58

Specifications

RSKM:Risk Management
RSKM pool will have RSKM fund in the RSKM pool.
The fund of RSKM pool will come from:
1.BSIP74;
2.BSIP62;
3.Market fee of bitasset;

Every bitassset have their separated RSKM pool.

First: The RSKM pool will handle the bad debt which collateral ratio < 1;

The bitasset fund in RSKM pool will close parts position automatically;
The bts token fund in RSKM pool will make the collateral ratio of RSKM pool > 1;

Second: If the collateral ratio of RSKM pool < 1;

The Management account of bitasset will issue the "Stability bond" to the market(Stability bond/bitasset) to buy enough bitasset to make the collateral ratio of RSKM pool >= MCR;

If the collateral ratio of RSKM pool < 1 again, issue the "Stability bond" second time(Stability bond/bitasset) to the market to buy enough bitasset to make the collateral ratio of RSKM pool >= MCR;

This is the cycle.

Stability bond/bitasset market is a free market, everyone can trade.

If "Stability bond" can't buy enough bitasset, so the holders of bitasset have made a decision, they must suffer the devalue.

Third: When the RSKM pool begin to handle the bad debt which collateral ratio < 1;

The market fee of bitasset will not have the referral reward;
BSIP74 will begin to charge the bitasset as the fees, so the BSIP74 must can charge the bitasset as the fees;

Fourth: The bitasset comes from market fee and BSIP74/BSIP62 will close the position slowly;

Fifth: When the position of RSKM pool > 5, then begin to buy back the "Stability bond";

The interest of "Stability bond" will be determined by the Management account of bitasset when begin issue the "Stability bond".

Problem: Interest Mode and buy-back time and order.

Sixth: After repurchased all the "Stability bond" and closed the position;

Recover the market fee referral reward;
Recover BSIP74 to charge the collateral as the fees;

Flow of Funds: BSIP74/BSIP62/Market fee of bitasset → Management account of bitasset → RSKM pool

The Management account of bitasset will manage how many funds inflow into the RSKM pool.

STABLECOIN MANAGE ACCOUNT


Summary for holders

Maybe this RSKM pool will lock a lot of bts.


See also

https://blog.bitmex.com/the-bitmex-insurance-fund/
https://blog.bitmex.com/bitmex-insurance-fund-your-questions-answered/
https://cdn.bytom.io/res/MOV-Stable-EN.pdf
https://www.bitmex.com/app/insuranceFund
https://www.binance.com/en/futures/funding-history/2
« Last Edit: May 27, 2020, 01:30:33 am by binggo »