Author Topic: BitUSD Market Maker - Proposal for Discussion  (Read 17701 times)

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Offline bytemaster

Re: BitUSD Market Maker - Proposal for Discussion
« Reply #30 on: August 29, 2014, 06:18:32 pm »
i am a friend of kiss - but why make everything more complicated?

just leave the market the market and watch. why act after 5 DAYS with major bugs, many people coundn't buy etc. etc.
keep in mind. maybe the changes will hurt the system in the future and you need changes, after changes - this will hurt BTSX big time!

add one simple rule

1. if the short is x away from the median the margin will double, tripple etc. it should be possible to make a trade but the possibility of a margin call should be increased

I thing going short at should prioritize higher collateral but no reason to allow it at prices below parity.   We need to provide liquidity for BitUSD longs to sell. 
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Offline Method-X

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #31 on: August 29, 2014, 06:19:30 pm »
Any changes made should be limited to ONE VARIABLE. Make one change that you expect will result in the biggest difference and then observe what happens.

Offline Shentist

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #32 on: August 29, 2014, 06:19:34 pm »
maybe invest some btsx funds from invictus to buy bitUSD and not in BTSX.

Offline yiminh

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #33 on: August 29, 2014, 06:36:23 pm »
we have longs and shorts of BitUSD in the market already established position, you should avoid changing the rules in the middle of the game, let the game plays itself out, if doesn't work, then start over, it will not be the end of the world. It's only fair.

Offline kisa

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #34 on: August 29, 2014, 06:40:07 pm »
In all the readings about market pegs I read, Sally wanted to hedge her position in bitUSD.   We never found Sally.
So who wants bitUSD? Who are they?  What problem does bitUSD solve?

what's the spelling of "Sally" in Chinese, Russian, or Argentine - maybe there she lives?

Offline yiminh

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #35 on: August 29, 2014, 06:41:13 pm »
meanwhile, fix the ! bug.

Offline Empirical1

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #36 on: August 29, 2014, 06:42:42 pm »
we have longs and shorts of BitUSD in the market already established position, you should avoid changing the rules in the middle of the game, let the game plays itself out, if doesn't work, then start over, it will not be the end of the world. It's only fair.

The game has been played since the beginning with the knowledge that the goal was to peg as close to parity as possible and that other options would be implemented as needed, so this is all within market expectations and benefits shareholders imo.

I advocated strongly that BitAssets should have been marketed more clearly as 'beta' than they were at launch, not doing so has resulted in Bitassets being oversold initially relative to where the code really was, but that's a separate issue. 

Offline tonyk

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #37 on: August 29, 2014, 06:44:03 pm »
1.The system buys and sells all the bitUSD at current price (average feed provided by the delegates) with 0.5% spread.

2.Everyone can lend BTSX  to the system. Any amount (based on current value) can be withdrawn at any time after min 1 week initial requirement. (It is more like a stake in the auto buy bussines)

3.Each week the system calculates profit and distributes the profit proportional to each contributor -(Contributed amount * time);

4.Each week the system if at a loss, calculates current value of $1.

5.If Contributed value (loans/stake) reaches 0 for any reason, the system starts printing BTSX. Newly printed money must again reach 0 before any new profit is distributed.

[edit] Can be done with 2x,3x BTSX value set aside at each particular bitUSD issuance.
« Last Edit: August 29, 2014, 06:48:10 pm by TheOnion »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

clout

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #38 on: August 29, 2014, 06:44:51 pm »
meanwhile, fix the ! bug.

I think this would help the peg tremendously. Can you please fix the "market_add_collateral" command? Thanks.  8)

Offline yiminh

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #39 on: August 29, 2014, 06:53:33 pm »
if BTSX goes to zero nothing will peg, only thing you can do is to be fair in the mean time to not totally destroy 3i's reputation and intergrity.

Offline oldman

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #40 on: August 29, 2014, 06:53:45 pm »
BM's proposal is a good plan B if the peg continues to struggle in a more liquid market or as a fail-safe protocol if someone figures out how to attack/manipulate the peg.

However, I agree with the prevailing sentiment that we need a stable interface and some time before making any serious changes.

The fact that the peg is holding as well as it is given the liquidity/wallet is nothing short of amazing.

I am personally not participating in the market until the wallet is stable and the trading platform is released; there are probably a lot of folks in the same boat.

So I would vote for prioritizing on fixing the bugs and getting the system stabilized as-is, collecting some performance data in a more liquid market and then perhaps tweaking.

There should be a fail-safe protocol that would automatically identify and correct broken/manipulated pegs - would really help with investor confidence in pegged/consensus assets.

Perhaps delegates will have to continuously feed asset prices and the feed vs. market price are given a tolerance that if exceeded engages a bot.

Offline Empirical1

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #41 on: August 29, 2014, 07:06:56 pm »
I am personally not participating in the market until the wallet is stable and the trading platform is released; there are probably a lot of folks in the same boat.

I am in that boat.

However the better BTSX does in general, the more long term BTSX bulls there will be in general, not so? 
the more BTSX bulls there are, the more the $ will be shorted on average below the peg. (Because bulls will pay a premium to increase their BTSX exposure) not so?

As a result if the market believes BTSX will be a good investment in the next 12 months vs. the dollar then BitUSD will peg too far below the dollar,  therefore BTSX won't be a good investment in the next 12 months... 

This is messed up.

As I understand it atm, we need to separate the bulls into an options market or make them pay a premium near parity vs. allowing them to continue shorting below the peg ASAP.

I would like to implement that without the market maker and see the results.
« Last Edit: August 29, 2014, 07:08:58 pm by Empirical1 »

Offline vlight

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #42 on: August 29, 2014, 07:12:09 pm »
Will launching BitGLD now be bad for BitUSD?

Offline Agent86

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #43 on: August 29, 2014, 07:19:06 pm »
Any changes made should be limited to ONE VARIABLE. Make one change that you expect will result in the biggest difference and then observe what happens.
+5%

please just make the change that prevents any short that is below the median price feed from being matched...

Any reason not to make the change?
??

Also, arb bots seem like they could open new attack vectors because they will predictably buy unlimited quantities without changing their price.  It gives a gigantic incentive to manipulate feed or take advantage of a bad feed that isn't otherwise there.

Regardless of this, I think arb bot is unnecessary and will waste time.

Offline Empirical1

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #44 on: August 29, 2014, 07:29:15 pm »
Will launching BitGLD now be bad for BitUSD?

I think BitBTC in particular will peg closer to parity with the 'we will ultimately achieve close to parity' mandate. https://bitsharestalk.org/index.php?topic=7718.msg102819#msg102819 As a result it should help BitUSD.

I'm sure long term there is a lot of demand for BitGold, but as gold is the ultimate safe haven and BTSX is not robust/decentralised yet, I imagine genuine BitGLD long demand short term would be limited.

Given how much CNY demand BTSX has, I don't know how much BitCNY demand there will be short term, that is the one that interests me the most.