Author Topic: 2020-11-06 Old bitCNY parameters adjustment  (Read 139 times)

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2020-11-06 Old bitCNY parameters adjustment
« on: November 06, 2020, 07:58:40 am »
Purpose:
to restore the peg of bitCNY in the long run and mitigate the issue that some debt positions' collateral ratio is too low.

Changes:
ICR (Initial collateral ratio) adjusted from 315% to 330%
MCR (Maintenance collateral ratio) adjusted from 220% to 230% , then 250%
MSSR (Maximum short-squeeze ratio) adjusted from 180% to 190%
MCFR (Margin call fee rate) adjusted from 5% to 7%
Maximum supply adjusted from 23,000,000 to 21,000,000

Current parameters:

ICR (Initial collateral ratio) 330%
MCR (Maintenance collateral ratio) 250%
MSSR (Maximum short-squeeze ratio) 190%
MCFR (Margin call fee rate) 7%
FSO (Force settlement price offset) 2%
FSFP (Force settlement fee percent) 1%

The median feed price is 0.22 CNY/BTS.

Borrowing is enabled. The maximum supply is limited to 21,000,000 bitCNY.


Note:

* As of writing, market trading price of BTS on CEXs is around 0.12 CNY, the collateral ratio (CR) of the debt position with the lowest CR in the BitShares DEX is 120%, the corresponding black swan price is 0.10 CNY.

* the ICR value 330% for feed price 0.22 effectively means 180% for market price 0.12, and the corresponding black swan price is 0.0667:
0.22 / 330% = 0.120 / 180% = 0.0667

* the MCR value 250% for feed price 0.22 effectively means 136.4% for market price 0.12, and the corresponding black swan price is 0.088:
0.22 / 250% = 0.12 / 136.4% = 0.088

* the MSSR value 190% for feed price 0.22 means collateral of low-CR debt positions will be listed for sale at 0.22 / 190% = 0.1158 bitCNY
** the MCFR value 7% means the price for buyers' is 0.22 / (190%-7%) = 0.120218579 bitCNY
** 0.1158 / 0.12 = 96.5% which means the actual penalty for being margin called is 3.5%
« Last Edit: November 13, 2020, 06:34:55 am by abit »
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