Hertz Updates - Seeking price feed publishers!

in #bitshares2 years ago (edited)

Hertz ABA Update!

Hertz (Hz) is a Algorithm Based Asset (ABA) which is pegged against the USD and modified to oscillate using a sine wave, thus we are able to create potential phases of buying and selling pressure.

I've updated the smartcoin settings & description and submitted a new PR on wackou's price feed script repo to change 'amplitude=1/3' to 'amplitude=0.14' since the amplitude was changed from 50%, to 33.33% to finally 14%.

Why the reduction in amplitude? Since this is the first Hertz ABA, it makes sense to reduce the volatility. If Hertz proves popular then we can look into a higher amplitudes like 33% or even 50%. Really, there's nothing stopping anyone creating their own Hertz ABA with modified properties (different amplitude, period, etc).

Properties of Hertz (Hz):

  • Amplitude: 14% (NOT 33% nor 50% - It was changed to 14% for the first HERTZ asset).
  • Period: 28 days.
  • Daily price feed change: 2% per day.
  • Max price feed rate: $1.14
  • Min price feed rate: $0.86

Smartcoin settings:

  • Maintenance collateral ratio (MCR): 175%
  • Maximum short squeeze ratio (MSSR): 150%
  • Max feed lifetime: 1440
  • Delay for forced settlements (minutes): 720
  • Percent offset of forced settlements: 1%
  • Min number of feeds: 7

Price feed scripts:

Explorers

Who can currently provide price feeds?

Currently only active witnesses are able to provide price feed updates for the Hertz ABA. If you are a Bitshares witness then please begin providing price feed updates for Hertz.

It won't be active until there are 7 active price feed publishers so it might be a few weeks.

Want to know more?

Check out: "What is the HERTZ Algorithm Based Asset?"


Any questions about Hertz? Do you have any ideas for your own Algorithm Based Assets?

Best regards,
@cm-steem

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I am still confused about the trade mechanics. Last time we spoke I asked you who will buy at the top and you said that the shorters will. Now, the only way of shorting on Bitshares DEX that I am aware of is locking your bts as collateral, creating an asset out of thin air, buying something else with it, waiting until it rises, buying back the asset you created, returning what you owe back to the platform and keeping the difference. If that sequence is applied to hertz, then you create new hertz at the top, buy bitUSD with it, wait two weeks, buy hertz with bitUSD when it's at the low and return the hertz that you borrowed to the system.
In other words, even when you short, you are still buying at the low. So the question remains, who will buy it on the top? How will you realize the gain from the fluctuations if there's no one you can sell it to?
Sorry if I'm too dense :)

I am still confused about the trade mechanics. Last time we spoke I asked you who will buy at the top and you said that the shorters will.

The top is the moment of maximum sell pressure by shorters who want to sell the token for maxium possible debt destruction potential.

At the top, everyone that bought at the bottom can attempt to 'force settle' rather than try to sell it alongside the shorters, that way they can realize their gains.

Who would buy at the top? Those who want a far greater size exit from Bitshares and don't mind waiting till next month for the same settlement price, or who can accept the maximum 28% feed price depreciation (say the asset you sold for hertz dropped more than 28%).

Who would short at the bottom? Potentially large scale shorters - try throwing up a several million dollar bitUSD sell wall and see how it affects the market, where as people will be jumping at the opportunity to realize the upcoming asset appreciation phases. Why would a shorter risk a 28% max debt appreciation? If they believe that they can make more than 28% in 2 weeks then it's worth it.

If that sequence is applied to hertz, then you create new hertz at the top, buy bitUSD with it, wait two weeks, buy hertz with bitUSD when it's at the low and return the hertz that you borrowed to the system.

Yeah, that sounds about right.

If you hold the asset (not the debt) you can force settle at any moment (bearing in mind the 720 min delay). If you have debt (you shorted the token) you must buy the token from someone else on the market before settling your debt, and if your collateral drops too far you'll be force settled.

I sincerely appreciate your post. The content is good and the wave sign is amazing. Keep it up. I follow and upvote you.

Call me stupid, Read the post in which you introduced Hertz asset. The example at the bottom of that post is one that applies to a normal trade. It did not visualise Hertz for me. Can you explain in laymans terms what Hertz is?

Hertz is similar to bitUSD, except its settlement price fluctuates following a predictable sine wave depending on the time of the month. So the token will fluctuate between $0.86 and $1.14 constantly.

That much I was able to take away from your explanations. I'm wondering what the benefit is to a fluctuating pegged currency? It looks to me that it introduces more complex coins, something that is shown dramatic in the fiat world with the many complex financial instruments that industry created and caused the financial crisis in 2007/2008 and will likely causes future financial crises.

It's a new type of asset, sure but it's by no means anything like the sub prime mortgage crisis.

For one, that was in the trillions of dollars range where as this may be in the small millions if it takes off. Another reason is that the sub prime mortgage crisis was a massive fraudulent operation executed by many centralized banks - bitshares is decentralized, the asset will have proven collateral (not fraudulent) and it will fluctuate within its amplitude range where as the sub prime mortgage crisis was an uncontrollable flash crash once everyone realised they were trading garbage.

Honesty its absurd to compare the two, but if you think hertz could be a trillion dollar marketcap asset then that would mean bitshares would be worth thousands each.

I personally have nothing against new type of assets, and I also didn't intend to compare Hertz to sub prime mortgage crisis. I simple wanted to point out when adding complexity to financial instruments, the mass will not understand it. Heck, the $ sign on Steemit posts is seen by many Steemians as a US$, while it in fact isn't.Many Steemians also think that the $ value is for them, but it isn't. On crypto exchanges, many newbie or unexperienced traders/investors think USDT is US$, but it is't. That said, I do appreciate you algorithm based asset and I hope it'll gain traction! :)

This sounds cool, thanks for sharing with us mate 😊😊😊😊

thank you for the post. appreciate it

Very interesting and fantastic post greetings friend

Intresting Content

Good job! Nice analysis, nice statistics, I highly commend you and lookforward for more post. I follow and upvote you.