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RE: On Improving Resilience of the Ecosystem in the Wake of Last Week's Bloodbath
So let me see if I understand -- you want to build an automated stop-loss for the entire crypto market?
So let me see if I understand -- you want to build an automated stop-loss for the entire crypto market?
No. Not a stop loss, and certainly not for the entire crypto market. More like an insurance policy targetted specifically and exclusively at the traders who borrow price-stable smartcoins into existence on the BitShares Decentralized Exchange.
Interesting, I think the volatility that concerns you is the growing pains of an asset in it's infancy.
Are "price-stable smartcoins" already a thing or did you just ~coin~ that? ;)
What do you think bitusd is?
I actually wasn't aware of that until now. Thanks :)
I probably should have been more clear that this post was meant to be an open letter to my fellow shareholders in the BitShares Decentralizeed Autonomous Bank & Exchange. There are a multitude of resources available with information about how it works. I would even be more than happy to do a Q&A post about BitShares to spread the wealth of knowledge. This thread, however, is not an appropriate venue for such Q&A.
Well I'm glad you weren't cuz now I know what Bitshares are!
You're welcome. Information is a form of wealth that tends to accumulate when it is shared.
THAT is an awesome quote.
Thanks you, but I'm not quoting anything/anyone. It's original.
That's what I meant. It's an awesome original quote by you.
Could you explain by an example, how would it work? I am not too savvy with the trading stuff
So the basic idea is it would be a piece of software ultimately bound to the BitShares blockchain, that would have its own reserve pool of funds. This reserve would be grown with membership dues from its members. It would provide a safety net similar to an insurance policy to traders that maintain debt positions on the DEX, who choose to be its members. by covering their asses in the event that they are unable to react to a market panic with the urgency such an event demands.
Specifically, the services would consist of monitoring collateral levels of its members, and automatically adding collateral to positions in risk of getting liquidated. The rules for when and to which of its which member's positions adds collateral to would most likely be decided upon democratically by its members. Then, during a crash like the one on the 12th, it would identify which of its members were in the most danger (as per the rules agreed upon by its memers), and automatically increase the collateral of their positions, with an obvious expectation that they would make an effort to replace that collateral with their own ASAP so that the resources it tied up would be freed up and once again available as a safety net or all of its members.
Edit: The precise rules should be essentially open-ended. I envision something more along the lines of an extensible framework for running such an entity, with the various permutations of governing rules ultimately dictated by the free market.