Author Topic: Gross overlooking of key aspect of RPM.  (Read 3077 times)

randpaulcoindev

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Gross overlooking of key aspect of RPM.
« on: January 23, 2015, 08:12:41 am »

I just realized that price discovery is absolutely necessary before I can bootstrap any of the assets.

Yuck. This means finding at least one site that will take my coin so that we can get pricefeeds for RPM or we use OTC market I suppose. That sucks, it is a bit of a chicken and egg problem. Our primary value as a coin comes from the bitAsset system, but it can't even come into play until we have price discovery. Price discovery requires being listed somewhere.

So basically I have to get a decentralized exchange to host my coin for bitAssets to work.  This dependency didn't come about for BitShares since it was such a big name to begin with.

The bitBTC gateway system they've cooked up doesn't do price discovery, correct?  So it is useless to solve this or I do misunderstand the scope?  Seems like I should post over there.

pc

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Re: Gross overlooking of key aspect of RPM.
« Reply #1 on: January 23, 2015, 09:33:02 am »
I just realized that price discovery is absolutely necessary before I can bootstrap any of the assets.

Yes, in my understanding the price feed is crucial for the market peg mechanism.

The bitBTC gateway system they've cooked up doesn't do price discovery, correct?  So it is useless to solve this or I do misunderstand the scope?  Seems like I should post over there.

The gateways only exchange actual BTC for BitAssets at a fixed ratio (usually 1:1 minus fees). This doesn't help you.

You could ask Poloniex. They seem to be very open to new coins, and they have experience with BTS-derived coins.
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cube

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Re: Gross overlooking of key aspect of RPM.
« Reply #2 on: January 23, 2015, 10:06:48 am »

I just realized that price discovery is absolutely necessary before I can bootstrap any of the assets.


Price discovery is for bitassets only.  The idea is to get and feed the market price of real fiat eg USD, EURO etc and community GOLD, SILVER, OIL etc. This helps in the pegging.

Why do you need to get a decentralized exchange to host your coin for bitAssets to work?

« Last Edit: January 23, 2015, 10:10:56 am by cube »
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graffenwalder

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Re: Gross overlooking of key aspect of RPM.
« Reply #3 on: January 23, 2015, 11:03:14 am »

I just realized that price discovery is absolutely necessary before I can bootstrap any of the assets.


Price discovery is for bitassets only.  The idea is to get and feed the market price of real fiat eg USD, EURO etc and community GOLD, SILVER, OIL etc. This helps in the pegging.

Why do you need to get a decentralized exchange to host your coin for bitAssets to work?
\
I think he meant centralized exchange, although it could be done on both.
But yeah you have to have it listed on an exchange, for the the assets to work.
Having only a feed of assets doesn't help you, you need of feed price for RPM to.

The assets are collateralized by RPM in this case. Letting the markets go free on RPM, would mean that people are able to short against themselves at high prices.
For Example 100,000 RPMUSD for 1 RPM. Then you would just let the short expire, and have a nice 100,000 RPMUSD.

So it's absolutely vital to have feeds for both RPM and the assets. And not allow shorting above feed price. If not your RPMassets would be heavily under collateralized.
 
« Last Edit: January 23, 2015, 11:13:01 am by graffenwalder »

graffenwalder

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Re: Gross overlooking of key aspect of RPM.
« Reply #4 on: January 23, 2015, 11:21:41 am »
There's also another thing you should consider.
You need to have some volume on preferably more than one exchange.

If not feed prices for RPM are to easy to manipulate, with a possibility of a  black swan event.
« Last Edit: January 23, 2015, 11:49:35 am by graffenwalder »

randpaulcoindev

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Re: Gross overlooking of key aspect of RPM.
« Reply #5 on: January 23, 2015, 12:15:14 pm »
There's also another thing you should consider.
You need to have some volume on preferably more than one exchange.

If not feed prices for RPM are to easy to manipulate, with a possibility of a  black swan event.

This is another thing to consider.  People are really going to try and push around the market.  I'm not even sure how to prevent that.

I've actually had some thoughts how to make my own market but it is very complex and would involve a lot of coding. I did not bother to try and obtain a large stake where I feel I could make up for the time if it became very involved. (multiple months of full time coding possibly)

My other thought for price discovery is to hold all the RPM sent to me in escrow and issue assets which are then traded. Do cashouts once a week, possibly automate the purchase of the assets.

Actually I could use the bitBTC:BTC gateway if open sourced but swap out bitBTC for RONPAULASSET which then trades as a UIA and I get price discovery?

pc

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Re: Gross overlooking of key aspect of RPM.
« Reply #6 on: January 23, 2015, 12:22:44 pm »
Actually I could use the bitBTC:BTC gateway if open sourced but swap out bitBTC for RONPAULASSET which then trades as a UIA and I get price discovery?

That should work. The problem with that is that the trade volume of RONPAULASSET will be lower than on a small exchange (due to the complicated transfer process plus trust issues), which makes it even more susceptible to manipulation.
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graffenwalder

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Re: Gross overlooking of key aspect of RPM.
« Reply #7 on: January 23, 2015, 12:44:04 pm »
Actually I could use the bitBTC:BTC gateway if open sourced but swap out bitBTC for RONPAULASSET which then trades as a UIA and I get price discovery?

That should work. The problem with that is that the trade volume of RONPAULASSET will be lower than on a small exchange (due to the complicated transfer process plus trust issues), which makes it even more susceptible to manipulation.
Prices are discoverd when traded. Not when converted, how would you know what the conversion rate is?

It shouldn't matter for price discovery if the gateway is BTC:RONPAULASSET. I think it would be better if the gateway was RPM:RPMASSET.

Edit: this would solve sending between all parties: RPM, BTS, centralized exchanges
« Last Edit: January 23, 2015, 12:48:36 pm by graffenwalder »

pc

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Re: Gross overlooking of key aspect of RPM.
« Reply #8 on: January 23, 2015, 01:05:33 pm »
I think it would be better if the gateway was RPM:RPMASSET.

Yes - I thought that was what he had in mind.
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graffenwalder

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Re: Gross overlooking of key aspect of RPM.
« Reply #9 on: January 23, 2015, 01:14:10 pm »
The most easy way to do this, would be contacting BTER, they seem to be DPOS freindly.
Set the conversion rate 1:1, give them some of the UIA from BTS
Allow bter to send the UIA to BTS.
Once they run out of UIA, swap them for RPM.

It's the most user friendly, however this would create a bit of an centralized and trust issue.

But once volume picks up on RPM, and markets are self sustaining, you could opt for cutting the RPM price feed.
If I'm not mistaken this is the long term plan for BTS too.

cube

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Re: Gross overlooking of key aspect of RPM.
« Reply #10 on: January 24, 2015, 09:08:15 am »

I just realized that price discovery is absolutely necessary before I can bootstrap any of the assets.


Price discovery is for bitassets only.  The idea is to get and feed the market price of real fiat eg USD, EURO etc and community GOLD, SILVER, OIL etc. This helps in the pegging.

Why do you need to get a decentralized exchange to host your coin for bitAssets to work?
\
I think he meant centralized exchange, although it could be done on both.
But yeah you have to have it listed on an exchange, for the the assets to work.
Having only a feed of assets doesn't help you, you need of feed price for RPM to.

The assets are collateralized by RPM in this case. Letting the markets go free on RPM, would mean that people are able to short against themselves at high prices.
For Example 100,000 RPMUSD for 1 RPM. Then you would just let the short expire, and have a nice 100,000 RPMUSD.

So it's absolutely vital to have feeds for both RPM and the assets. And not allow shorting above feed price. If not your RPMassets would be heavily under collateralized.

That makes sense now.  Thanks.
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randpaulcoindev

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Re: Gross overlooking of key aspect of RPM.
« Reply #11 on: January 25, 2015, 10:44:54 am »

Yes it appears I had a brainfart. I meant that I will issue a RPM asset on BTS .. then make a gateway RPM:RPMASSET.

It appears monsterer's code will almost work but I'll have to use mono and C# to leverage it.  Not a big deal and definitely easier than a recode from scratch. I'll have to remove the BTC side and just duplicate the bitBTC side. In theory it should be simple. With that I have price discovery that is centralized around a adhoc gateway running on my system.

I am concerned about the market being pushed around.  I feel this is the biggest problem for Cryptos. Bitcoin gets pushed around but then DPOS with BitAssets seems like it might even amplify the issue and end up scare off the less sophisticated market participants. I wonder if some sort of moving average stuff should be put on the price feed script to dampen these issues.

graffenwalder

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Re: Gross overlooking of key aspect of RPM.
« Reply #12 on: January 25, 2015, 11:31:36 am »

Yes it appears I had a brainfart. I meant that I will issue a RPM asset on BTS .. then make a gateway RPM:RPMASSET.

It appears monsterer's code will almost work but I'll have to use mono and C# to leverage it.  Not a big deal and definitely easier than a recode from scratch. I'll have to remove the BTC side and just duplicate the bitBTC side. In theory it should be simple. With that I have price discovery that is centralized around a adhoc gateway running on my system.

I am concerned about the market being pushed around.  I feel this is the biggest problem for Cryptos. Bitcoin gets pushed around but then DPOS with BitAssets seems like it might even amplify the issue and end up scare off the less sophisticated market participants. I wonder if some sort of moving average stuff should be put on the price feed script to dampen these issues.
Not totaly sure if it still exists in the current BTS, but there was an average moving price.
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biophil

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Re: Gross overlooking of key aspect of RPM.
« Reply #13 on: January 26, 2015, 03:43:01 pm »
Something else I think you're overlooking is that you don't have to launch silver and gold on the same day as RPM. Trading won't start until enough delegates are publishing feeds for the asset, and they can wait to publish feeds until the price of RPM has stabilized on an external exchange (the exchange could be bter, poloniex, or BTS). I do think you should try to get at least one centralized exchange to list it, because that will significantly increase its exposure. If you only list it on BTS, RPM would probably just end up being sort of a permanent subsidiary of BTS.

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randpaulcoindev

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Re: Gross overlooking of key aspect of RPM.
« Reply #14 on: January 27, 2015, 08:58:43 pm »
Something else I think you're overlooking is that you don't have to launch silver and gold on the same day as RPM. Trading won't start until enough delegates are publishing feeds for the asset, and they can wait to publish feeds until the price of RPM has stabilized on an external exchange (the exchange could be bter, poloniex, or BTS). I do think you should try to get at least one centralized exchange to list it, because that will significantly increase its exposure. If you only list it on BTS, RPM would probably just end up being sort of a permanent subsidiary of BTS.

Sent from my SCH-S720C using Tapatalk 2

I hear your points and really can't say I particularly disagree with any of them.

I just do not want to rely on a centralized exchange. I would like to think of them as being secondary but at some point I have to stop holding the amount of escrow that would accumulate. Likely I would require having someone outside the country do it also as I am not sure about the laws. <wink>

Even better is BitShares gets their UIA tokens on a dex exchange working and we go there.

I could also make a 2 headed exchange and have the same service running on NXT's DEX. Not sure about the exchanges that sit on top of bitcoin. Honestly I'm scared to even mess with it but in theory as long as people are comfortable with me as escrow there are multiple options. At some point I would accumulate too much escrow though and we'd be no better off .. While I think it is reasonable to trust the developer for this at the start, it can really only work in bootstrap phases.

What is better, NXT asset exchange or bter?  Would the Chinese like RPMs?