Solution to liquidity points bugs
With each iteration to the liquidity points system, abit has shown diligence and creativity in ensuring he maintains his monopoly on the lucrative 28,800 STEEM per day windfall he continues to accumulate.
While minimizing the actual liquidity he has to provide.
Now I am trying to fix this and willing to creating real liquidity at low spreads as the liquidity rewards are quite generous.I am willing to absorb market losses as a cost of doing business.
I imagine there are half a dozen to a two dozen others that would be willing to do the same.
So I propose that we allocate some percentage of the liquidity rewards to contracted market makers, who agree to provide liquidity for a monthly (weekly?) basis. Their contract would be subject to community review and approval before it is renewed. Just like it is hard to automate spam detection, but a person can easily tell, we can rely on human judgement as to which market makers are worth renewing.
As it is, if the rewards system isnt fixed, nobody else in their right mind would bother, which means abit will be very happy, but the community will be at his mercy for setting the conversion price of STEEM to Steem dollars.
By selecting a dozen contracted market makers and leaving half the rewards for fixing the incentives like I posted in https://steemit.com/trading/@jl777/steem-dollars-discount-why-is-it-always-below-open-market-price we can get a liquid STEEM <-> Steem Dollar conversion at current realtime market prices, have a dozen well funded market makers (the rewards they get will be plenty to fund their market making) and there is still the free for all points that people can battle against abit for.
Alternatively, we can ask abit to not actively sabotage the other market makers. Maybe if we said "please" he would agree?
I think it's great that @abit is trying to game the system as well as he can. It's good to find the weak points of the liquidity rewards mechanism as soon as possible, so it can be updated to produce more desirable results.
Good idea. But isn't it some kind of waste of resources that use a dozen people to do a work which can be well done by one person or two?
sure, lets centralize things and just automatically hardcode into the blockchain consensus the abit payment for the wonderful non-realtime high spread market you have been making
want to put that up for a community wide vote?
It's a good idea to let the blockchain do the market making by itself. Not too hard to implement. No need to reward me indeed. @dan
So your proposal is to have one contracted liquidity provider, subject to community review on the quality and cost of service they provide? Maybe that is reasonable.
I would be willing to provide .001 spreads using the liquidity from the liquidity rewards, pegged to a realtime implied value of Steem Dollars, ie 1 USD.
If the goal is that simple, why not let the system do the market making by itself?
i think the goal is to distribute STEEM to market making oriented traders/organizations, which at the same time would create liquidity and vested interests from the financial sector.
Enabling a monopoly does not solve this, even if it is a non-profit one providing a public service and certainly not a profiteer who is not concerned about his effects on the community.
So your actions have gotten you more short term profits, but it seems the liquidity points will be revised to prevent such monopolistic profiteering: https://steemit.com/steem/@jl777/steemit-has-the-most-responsive-dev-team
Now if you are not willing to be a team player and help STEEM achieve its goals, then that is your choice, but I would suggest to look at the big picture. You could have kept a quarter, maybe more of the awards and let others win the majority and in general help STEEM achieve the distribution goals. Without vocal complaints by all the other market makers the system could have been maintained.
It is like the DAO hacker, if he limited himself to a couple million, maybe the hardfork wouldnt get the support it needs. Maybe you need to revise your algorithms to take the community reaction into account, instead of simply maximizing the short term profits in your wallet
Great! You've succeeded breaking my walls. Where are your 0 spread walls now?
Current median price is 3.28, please try to maintain the peg. I'm willing to donate 10K STEEM when you actually started doing that work (that said, if you've setup walls around the peg).
I will work on this today. It took a long time for steemd to sync but I think I can start testing an automated market maker today. Keep in mind I dont have the capital to break through large off-market walls