BSIP 76: Threshold for price feeds through voting #222

abitmore · 2019-09-26T00:31:34Z

Created bsip-0076.md.

pmconrad · 2019-09-26T05:52:50Z

bsip-0076.md

+
+In order to maintain the peg of the smartcoins, smartcoins holders now have the right to be always
+possible to buy collateral at a "fair" price. For committee-owned smartcoins, the collateral is BTS.
+However, when the BTS token is being dumped in Centralized Exchanges with fake volume and even fake supply,


Please support these claims about something being "fake".

IMHO, whether fake or not is not the key point, even with true BTS someone can also do the shorting attack in CEX or even DEX, it's necessary to do feed price protection at some extreme scenario.

This 'fake volume/supply short attack' conspiracy has been outright rejected by ZB: https://twitter.com/ZB_Group/status/1188771828967206912?s=20

pmconrad · 2019-09-26T05:55:31Z

bsip-0076.md

+for the benefit of the platform and the BTS token holders.
+If a product brings more harm than benefit to the platform, its rules need to be optimized,
+under extreme conditions, the product needs to be halted.
+For smartcoins, when the cost to maintain the peg is too high to afford, it's time to give up the peg.


The cost for whom? Probably neither the asset owner nor the smartcoin holder.
So once again shorters are trying to bend the rules in their favour.

the cost of the debt position owners, but also the whole ecosystem, including the asset owner and the smartcoin holder. the whole ecosystem suffer the low price and the shortage of smartcoin for long time.

The cost has been directly shifted onto the bitasset holder from the debtor, their assets have been devalued to spare debtors from global settlement outcome.

pmconrad · 2019-09-26T05:57:17Z

bsip-0076.md

+# Rationale
+
+Ideally a smartcoin owner should be able to define a set of conditions about when to give up the peg
+and how to de-peg, but it needs time to design and implement. Before the final solution got worked out,


This is ridiculous. The peg is the only thing that justifies the existence of the smartcoin.
Introducing new ways to deliberately de-peg undermines the whole concept of smartcoins. Once again.

no, peg is not the only thing, and it is ridiculous to maintain peg without considering the cost and supply.

No time was allocated to design and implement the de-pegging mechanism, given the pre-wp activation forced implementation & consequential BSIP still being written to maintain operation of bitassets in a de-pegged state.

The smartcoin owners didn't define this de-pegging outcome, it was instead forced onto price feed publishers without asset owner input.

pmconrad · 2019-09-26T06:00:16Z

bsip-0076.md

+
+# Specification
+
+The BTS token holders define a threshold, if the market trading price of BTS is below the threshold,


The voting process is too slow to follow markets in any meaningful way.
The whole idea of setting an arbitrary threshold is absurd. What if I set up PC.USD with a value proposition like "This coin will always be worth 1 USD, except when I decide otherwise." How many would you buy?

More than one month later we still have the initial fake price feed 'threshold' set, the intention to vote on accurate price thresholds has failed to materialize.

pmconrad · 2019-09-26T06:04:14Z

bsip-0076.md

+witnesses should feed the threshold but not the market trading price, thus would effectively break
+the peg as intended. When the market trading price of BTS is above the threshold, witnesses should
+feed the market trading price, so the peg will be restored automatically. The mechanism is similar to
+the Global-Settlement Protection mechanism as described in [BSIP 58](bsip-0058.md).


No it's not.

GSP is not an arbitrary decision, it has a technical reason (undercollateralization).

GSP does not set an arbitrary threshold but has a precisely defined price.

GSP improves the value proposition of smartcoins because it replaces global(!) settlement with a mechanism that preserves collateral of other margin positions.

Global settlement protection through fraudulent price feeds is a betrayal of the smartcoin contract. If the protection was sufficiently described in 58 this BSIP would have been unneccessary.

bitcrab

suggest to add below logic in price feeding to protect shorting attack:

if MA5<1.05*market price
   feed price = market price
else feed price =(MA5+market price)/2

abitmore · 2019-09-26T10:03:49Z

@bitcrab as mentioned in the document, what value to be set as a threshold is not in the scope of this BSIP.

bitcrab · 2019-09-26T09:49:20Z

bsip-0076.md

+
+In order to maintain the peg of the smartcoins, smartcoins holders now have the right to be always
+possible to buy collateral at a "fair" price. For committee-owned smartcoins, the collateral is BTS.
+However, when the BTS token is being dumped in Centralized Exchanges with fake volume and even fake supply,


IMHO, whether fake or not is not the key point, even with true BTS someone can also do the shorting attack in CEX or even DEX, it's necessary to do feed price protection at some extreme scenario.

bitcrab · 2019-09-26T09:56:36Z

bsip-0076.md

+for the benefit of the platform and the BTS token holders.
+If a product brings more harm than benefit to the platform, its rules need to be optimized,
+under extreme conditions, the product needs to be halted.
+For smartcoins, when the cost to maintain the peg is too high to afford, it's time to give up the peg.


the cost of the debt position owners, but also the whole ecosystem, including the asset owner and the smartcoin holder. the whole ecosystem suffer the low price and the shortage of smartcoin for long time.

bitcrab · 2019-09-26T09:58:25Z

bsip-0076.md

+# Rationale
+
+Ideally a smartcoin owner should be able to define a set of conditions about when to give up the peg
+and how to de-peg, but it needs time to design and implement. Before the final solution got worked out,


no, peg is not the only thing, and it is ridiculous to maintain peg without considering the cost and supply.

grctest · 2019-11-02T15:40:50Z

bsip-0076.md

+However, when the BTS token is being dumped in Centralized Exchanges with fake volume and even fake supply,
+the value of the token is distorted, thus, forcing BTS token holders who have their BTS token trapped in
+debt positions as collateral to sell their collateral at the distorted price via margin calls or
+force-settlements is unfair.


This has always been a known risk for debtors; it's not unfair especially when these low prices have been sustained for over a month now.

grctest · 2019-11-02T15:42:34Z

bsip-0076.md

+the value of the token is distorted, thus, forcing BTS token holders who have their BTS token trapped in
+debt positions as collateral to sell their collateral at the distorted price via margin calls or
+force-settlements is unfair.
+The same situation applies to non-committee-owned smart coins as well.


Not true across the board, some smartcoins (like the norns) are simply not exposed to external price references in their smartcoin price feed scripts.

grctest · 2019-11-02T15:43:16Z

bsip-0076.md

+The same situation applies to non-committee-owned smart coins as well.
+
+Smartcoins are products of the BitShares platform, their rules are defined by the platform
+for the benefit of the platform and the BTS token holders.


No benefit allocated to the smartcoin holder?

grctest · 2019-11-02T15:45:08Z

bsip-0076.md

+Smartcoins are products of the BitShares platform, their rules are defined by the platform
+for the benefit of the platform and the BTS token holders.
+If a product brings more harm than benefit to the platform, its rules need to be optimized,
+under extreme conditions, the product needs to be halted.


What when halting (faking price feeds) causes more damage than simply allowing a GS to trigger?

The platform itself doesn't rely on the state of bitassets, blocks will keep being produced after global settlement events.

grctest · 2019-11-02T15:50:18Z

bsip-0076.md

+and how to de-peg, but it needs time to design and implement. Before the final solution got worked out,
+it's up to the price feed producers to execute the will for the asset owner on whether to maintain
+the peg at a given point and how to de-peg. For committee-owned smartcoins, the owner is actually
+all BTS holders who could express their will by voting, the price feed producers are the active witnesses.


By voting to remove active witnesses? Because this BSIP was not voted into activation by the network prior to this BSIP being forced onto price feed publishers.

grctest · 2019-11-02T15:54:13Z

bsip-0076.md

+The BTS token holders define a threshold, if the market trading price of BTS is below the threshold,
+witnesses should feed the threshold but not the market trading price, thus would effectively break
+the peg as intended. When the market trading price of BTS is above the threshold, witnesses should
+feed the market trading price, so the peg will be restored automatically. The mechanism is similar to


no price feed script changes to automatically switch over from fake price feeds to real feeds once the BTS price exceeds the set threshold? This probably won't be automatic since it's not been coded in such a manner

grctest · 2019-11-02T15:56:41Z

bsip-0076.md

+feed the market trading price, so the peg will be restored automatically. The mechanism is similar to
+the Global-Settlement Protection mechanism as described in [BSIP 58](bsip-0058.md).
+
+Changes to the threshold will be decided on individual committee-owned smartcoins by voting, each time


When will this happen? It's been more than 1 month with the initially set fake price feeds. How long will this bailout last?

grctest · 2019-11-02T15:57:39Z

bsip-0076.md

+
+Poll-BSIP**-Not change bitCNY feed threshold [from the previous value when applicable] to 0.2 CNY per BTS
+
+If the voting confirm the change, committee will announce the change at least 3 days before the change


3 days is insufficient time to request price feed publishers to change their feeds & to change price feed scripts.

grctest · 2019-11-02T16:00:58Z

bsip-0076.md

+
+Some people think it's the debt position holders' responsibility to always maintain their
+collateral ratio to a fair level. However, when the collateral's price can drop to zero due to
+unfair manipulation, it's not possible to always maintain a good CR.


There's no absolute proof of 'unfair manipulation' having taken place, in fact ZB outright refutes this accusation of yours: https://twitter.com/ZB_Group/status/1188771828967206912?s=20

It is the debtor's responsibility to maintain their collateral ratio, they fully acknowledged the risk of BTS price being influenced by CEX trading when they chose to open their market pegged asset debt positions, why bail out bad gamblers? No casino would allow you to take back your chips after you lost your hand.

When it's not possible to maintain your CR, you either get margin called or you trigger a global settlement. There was never an intended outcome where the bad debtor keeps their debt at the direct expense of the smartcoin holder & the network's branding.

grctest · 2019-11-02T16:01:37Z

bsip-0076.md

+Some people think it's the debt position holders' responsibility to always maintain their
+collateral ratio to a fair level. However, when the collateral's price can drop to zero due to
+unfair manipulation, it's not possible to always maintain a good CR.
+Higher or lower, there is a point that the peg would break.


When the peg breaks like this, global settlement should take place.

grctest · 2019-11-02T16:03:07Z

bsip-0076.md

+unfair manipulation, it's not possible to always maintain a good CR.
+Higher or lower, there is a point that the peg would break.
+
+This BSIP may negatively impact smartcoin holders since their holdings will likely devalue when


There is no 'may', this BSIP did directly negatively impact smartcoin holders holding value, they now hold fraudulently valued assets instead of pegged assets which always adhere to their originally designed contract. CNY & USD experienced up to 30% devaluation in the last month after the forced implementation of this BSIP (prior to any related WP activating).

grctest · 2019-11-02T16:04:57Z

bsip-0076.md

+
+This BSIP may negatively impact smartcoin holders since their holdings will likely devalue when
+the voted point is met, which would likely be worse than before.
+Businesses built on top of the smartcoins may be impacted.


Indeed, all CEX which have integrated bitassets are now indirectly misleading their users on the real value of the bitassets, further the asset details on the dex are now inaccurate (bitUSD != 1 USD anymore). Very little outreach to affected business parties seems to have taken place.

grctest · 2019-11-02T16:05:58Z

bsip-0076.md

+This BSIP may negatively impact smartcoin holders since their holdings will likely devalue when
+the voted point is met, which would likely be worse than before.
+Businesses built on top of the smartcoins may be impacted.
+Reputation of smartcoins as well as the BitShares brand may be impacted.


Hertz used to reference bitUSD as a secure USD price feed source, it has now switched to a real USD:BTS price feed reference. bitUSD has directly lost credibility as a BTS:USD price reference on the DEX as a consequence of this BSIPs actions.

grctest · 2019-11-02T16:08:19Z

bsip-0076.md

+Businesses built on top of the smartcoins may be impacted.
+Reputation of smartcoins as well as the BitShares brand may be impacted.
+
+Discussions about changing the threshold to what value is not in the scope of this BSIP.


Then how/where/when should these take place? There was an intention for this to be voted upon, but no vote was completed before implementation and no further vote has taken place to set a new accurate price feed in over a month - this threshold now seems permanent until BTS recovers to above the threshold price. Quite misleading.

grctest · 2019-11-02T16:09:48Z

bsip-0076.md

+Reputation of smartcoins as well as the BitShares brand may be impacted.
+
+Discussions about changing the threshold to what value is not in the scope of this BSIP.
+The values should be carefully selected to comply with the market status and to mitigate potential risks.


No proof of careful selection has been presented. Fixed fake prices have been set for over a month with no updated fake feed in sight. The real market status isn't being complied with & multiple risks were partly acknowledged but not mitigated at all.

grctest · 2019-11-02T16:10:28Z

bsip-0076.md

+
+Discussions about changing the threshold to what value is not in the scope of this BSIP.
+The values should be carefully selected to comply with the market status and to mitigate potential risks.
+Voters will need to evaluate each setting that is proposed in a BSIP poll.


Voters were not able to fully evaluate this BSIP before the proposed changes were implemented on the main network.

grctest · 2019-11-02T16:11:49Z

bsip-0076.md

+
+# Non-Technical Summary
+
+It is important to define a process for the BTS token holders to decide to change


BTS token holders did not decide to implement this, it was implemented in advance of any WP activating.

grctest · 2019-11-02T16:15:25Z

bsip-0076.md

@@ -0,0 +1,88 @@
+    BSIP: 0076
+    Title: Threshold for price feeds through voting


The polling mechanism was outright disregarded, this was implemented forcefully through coercion/intimidation of price feed publishers in advance of any related worker proposal activating. Inaccurate title, further no subsequent votes have taken place to set accurate feeds in over a month now. Seems highly misleading as a title.

abitmore added 2 commits September 26, 2019 02:30

Create bsip-0076.md

0a4a058

Add discussion

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abitmore mentioned this pull request Sep 26, 2019

BSIP76: Threshold for price feeds through voting #221

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pmconrad reviewed Sep 26, 2019

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bitcrab reviewed Sep 26, 2019

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Add rule "one poll for one bitasset"

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bitcrab approved these changes Sep 26, 2019

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bitcrab merged commit 4506cfd into master Sep 26, 2019

abitmore deleted the bsip76 branch September 26, 2019 19:07

ryanRfox mentioned this pull request Sep 26, 2019

BSIP76 - Revert Merge, Discussion and Core Team Review Required #223

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grctest reviewed Nov 2, 2019

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		# Specification

		The BTS token holders define a threshold, if the market trading price of BTS is below the threshold,


		Poll-BSIP**-Not change bitCNY feed threshold [from the previous value when applicable] to 0.2 CNY per BTS

		If the voting confirm the change, committee will announce the change at least 3 days before the change


		# Non-Technical Summary

		It is important to define a process for the BTS token holders to decide to change

		@@ -0,0 +1,88 @@
		BSIP: 0076
		Title: Threshold for price feeds through voting

BSIP 76: Threshold for price feeds through voting #222

BSIP 76: Threshold for price feeds through voting #222

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abitmore commented Sep 26, 2019

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abitmore commented Sep 26, 2019

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