Author Topic: BitUSD Market Maker - Proposal for Discussion  (Read 17703 times)

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Offline liondani

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #75 on: August 30, 2014, 01:52:02 am »
One way to absorb the short selling pressure to bitUSD is to throw more bitAssets on the market !!!
Think about it! The only way for someone to "bet" for BTSX if they don't have fresh money/BTC is to short a bitAsset....
Right now there is available only bitUSD, so all the pressure from the BTSX Bulls go there ... If we had bitCNY,bitEUR,bitBTC etc. the pressure would absorb "equally" to all...
so the market peg would be closer to parity for each of one, at least it would helped to some degree...

EXAMPLE:

bitUSD = -30% distance from parity point
bitEUR = -20% distance from parity point
bitCNY = -10% distance from parity point

so a smart BTSX BULL  that want to short a bitAsset because they think BTSX will rise 50%, will likely short bitCNY  ;D
so the end result on profits would be 50-10= 40% profit (when bitCNY gets 1:1 pegged vs CNY)
instead of 50-30= 20% profit (when bitUSD gets 1:1 pegged vs USD)

I know I have oversimplified my thought process but I wanted to give the idea...

Offline yidaidaxia

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #76 on: August 30, 2014, 01:53:13 am »
It will enforce bitusd pegged to usd for sure, but we still have the issue that people do not have incentive to hold bitusd especially when btsx goes up on the external market. At that time, u would never have the opportunity to get cheap bitusd even if u know bitusd would go down soon, and everyone will sell bitusd to system at 90% and no one want to buy it at 100%, then the market frozen. That means the pegging mechanism can not really work, it's just enforced to work. yes, “cheap bitusd” is bad, we need to avoid it, but the better way is to  provide incentive for holding bitusd in all the situation. In summay, i believe this would work in short term but could not resolve the issue fundamentally. we need to provide incentive like Gulu's proposal about market driven interest in another thread for mid term before the acceptance of bitusd by massive merchants will provide the incentive to hold and use bitusd in long term finally.
« Last Edit: August 30, 2014, 02:00:01 am by yidaidaxia »
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Offline Markus

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #77 on: August 30, 2014, 02:08:40 am »
My suggestion: Convert the BTC sitting in the Angel fund to BitUSD. Do this at 90%, announce it and make it trackable for everybody.

If this is an arbitrage opportunity, instead of complicating the market rules, why not just take advantage of it?

Offline liondani

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #78 on: August 30, 2014, 02:13:36 am »
It will enforce bitusd pegged to usd for sure, but we still have the issue that people do not have incentive to hold bitusd especially when btsx goes up on the external market. At that time, u would never have the opportunity to get cheap bitusd even if u know bitusd would go down soon, and everyone will sell bitusd to system at 90% and no one want to buy it at 100%, then the market frozen. That means the pegging mechanism can not really work, it's just enforced to work. yes, “cheap bitusd” is bad, we need to avoid it, but the better way is to  provide incentive for holding bitusd in all the situation. In summay, i believe this would work in short term but could not resolve the issue fundamentally. we need to provide incentive in mid term before the acceptance of bitusd by massive merchants will provide the incentive to hold and use bitusd in long term finally.

I thing we are making the mistake to conclude that  people will make decisions depended of BTSX market behavior...
Our target group is not only speculators (at least I hope so).
Many would have incentive to hold bitUSD on their BTSX Vault only for security/volatility reasons for example...
Others because they see an opportunity to make a profit "with no risk" buying undervalued bitUSD without to care about BTSX trend...
Other because they want to hold other bitAssets like bitGOLD etc.  ...

PS something I forgot to say before:  The BTSX platform must run without so many bugs ASAP and it must get more user friendly!!! It's crucial for mass adoption and to have the necessary liquidity ... I thing with much liquidity and with a big market cap, the market-peg for bitAssets will almost reach parity....
« Last Edit: August 30, 2014, 02:21:13 am by liondani »

Offline Markus

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #79 on: August 30, 2014, 02:19:32 am »
One way to absorb the short selling pressure to bitUSD is to throw more bitAssets on the market !!!
Think about it! The only way for someone to "bet" for BTSX if they don't have fresh money/BTC is to short a bitAsset....
Right now there is available only bitUSD, so all the pressure from the BTSX Bulls go there ... If we had bitCNY,bitEUR,bitBTC etc. the pressure would absorb "equally" to all...
so the market peg would be closer to parity for each of one, at least it would helped to some degree...

EXAMPLE:

bitUSD = -30% distance from parity point
bitEUR = -20% distance from parity point
bitCNY = -10% distance from parity point

so a smart BTSX BULL  that want to short a bitAsset because they think BTSX will rise 50%, will likely short bitCNY  ;D
so the end result on profits would be 50-10= 40% profit (when bitCNY gets 1:1 pegged vs CNY)
instead of 50-30= 20% profit (when bitUSD gets 1:1 pegged vs USD)

I know I have oversimplified my thought process but I wanted to give the idea...

Generalised, the current problem is that there are 50m USD worth of BTSX and 0.5m worth of BitAssets (all BitUSD). As long as this ratio is so extreme the BTSX bulls will have an enormous impact on BitAsset peg volatility. More different BitAssets will help close this gap.

Offline liondani

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #80 on: August 30, 2014, 02:22:35 am »
One way to absorb the short selling pressure to bitUSD is to throw more bitAssets on the market !!!
Think about it! The only way for someone to "bet" for BTSX if they don't have fresh money/BTC is to short a bitAsset....
Right now there is available only bitUSD, so all the pressure from the BTSX Bulls go there ... If we had bitCNY,bitEUR,bitBTC etc. the pressure would absorb "equally" to all...
so the market peg would be closer to parity for each of one, at least it would helped to some degree...

EXAMPLE:

bitUSD = -30% distance from parity point
bitEUR = -20% distance from parity point
bitCNY = -10% distance from parity point

so a smart BTSX BULL  that want to short a bitAsset because they think BTSX will rise 50%, will likely short bitCNY  ;D
so the end result on profits would be 50-10= 40% profit (when bitCNY gets 1:1 pegged vs CNY)
instead of 50-30= 20% profit (when bitUSD gets 1:1 pegged vs USD)

I know I have oversimplified my thought process but I wanted to give the idea...

Generalised, the current problem is that there are 50m USD worth of BTSX and 0.5m worth of BitAssets (all BitUSD). As long as this ratio is so extreme the BTSX bulls will have an enormous impact on BitAsset peg volatility. More different BitAssets will help close this gap.

Exactly! Couldn't say it better!  +5%

Offline liondani

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #81 on: August 30, 2014, 02:30:17 am »
As long as this ratio is so extreme the BTSX bulls will have an enormous impact on BitAsset peg volatility. More different BitAssets will help close this gap.

The gap will close after all when BTSX has grown enough and the BULLS are not so aggressive anymore...
Or better to say when the growing "speed" reduces a little bit...  because growing will never stop after all :P

Offline yiminh

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #82 on: August 30, 2014, 02:57:39 am »
For a short position to maximize their return they should cover and re-short as often as possible. 

That's totally unture for a large short trade( like 10,000 BitUSD short in this market).

Offline yiminh

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #83 on: August 30, 2014, 03:26:36 am »
I don't like playing shorts because the risk is limitless or at least your entire collateral, but that's the only way to play in the exchange if you think BTSX will go up in value, maybe we should have a options market for the BTSX longs. We may want to open a limited options market or bond market to test first, if all goes well, then open the BitUSD/BTSX market.

Offline f_bull

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #84 on: August 30, 2014, 04:26:28 am »
市场锚定?!这是开发者最脑残的想法!一点金融常识都没有,更是违背去中心化和区块链的本质!区块链的核心是不需要信任对方,而BTSX脑残地认为应该信任BitUSD=USD,应该信任喂价。。。。。

Offline coolspeed

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #85 on: August 30, 2014, 08:44:13 am »
 +5% +5%
Please vote for  delegate.coolspeed    dac.coolspeed
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Ggozzo

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #86 on: August 30, 2014, 11:56:05 am »
One way to absorb the short selling pressure to bitUSD is to throw more bitAssets on the market !!!
Think about it! The only way for someone to "bet" for BTSX if they don't have fresh money/BTC is to short a bitAsset....
Right now there is available only bitUSD, so all the pressure from the BTSX Bulls go there ... If we had bitCNY,bitEUR,bitBTC etc. the pressure would absorb "equally" to all...
so the market peg would be closer to parity for each of one, at least it would helped to some degree...

EXAMPLE:

bitUSD = -30% distance from parity point
bitEUR = -20% distance from parity point
bitCNY = -10% distance from parity point

so a smart BTSX BULL  that want to short a bitAsset because they think BTSX will rise 50%, will likely short bitCNY  ;D
so the end result on profits would be 50-10= 40% profit (when bitCNY gets 1:1 pegged vs CNY)
instead of 50-30= 20% profit (when bitUSD gets 1:1 pegged vs USD)

I know I have oversimplified my thought process but I wanted to give the idea...

Generalised, the current problem is that there are 50m USD worth of BTSX and 0.5m worth of BitAssets (all BitUSD). As long as this ratio is so extreme the BTSX bulls will have an enormous impact on BitAsset peg volatility. More different BitAssets will help close this gap.

But, if there is more bitUSD out there, there are more people trying to SELL it and less buyers because it's already been printed?

Offline CLains

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #87 on: August 30, 2014, 02:14:46 pm »
 +5% is the next big thing that will drive the price to the moon

Offline Blahbleuhbleuh

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #88 on: August 30, 2014, 02:24:56 pm »
Just my two cents. The first thing that needs to be implemented is an auto update feature. This will ensure people are up to date on their version and we don't get the "Insufficient Depth" too much anymore.

Ggozzo

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Re: BitUSD Market Maker - Proposal for Discussion
« Reply #89 on: August 30, 2014, 02:33:11 pm »
Just my two cents. The first thing that needs to be implemented is an auto update feature. This will ensure people are up to date on their version and we don't get the "Insufficient Depth" too much anymore.

I think the insufficient depth comes from I3 pulling their BTSX off the bid/ask. They were artificially creating depth by throwing their shares in the market. This would explain how they are able to halt trading. I certainly hope there isn't a kill switch otherwise.

I think the next fork will lower the depth requirement since participation isn't as robust as they thought.