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RE: Before entering into a smart contract - read the fine print!

in #bitshares8 years ago (edited)

The logic in the BSIP seems good to me. And I don't think it is fair to call this change a scam or robbery. My memory is a little fuzzy, but I think I do remember discussions in plain English on the forums about small settlement offsets in favor of the shorts and how settlement should be considered a last resort mechanism. So I don't have a problem with small (< 2%) offsets, especially if they can help with the peg (although I am not convinced they will help all that much). The main reason I don't have a problem with the small offset though is because the price feed isn't supposed to be super accurate anyway and even more significantly, you could easily lose more than 2% from liquidity (and price movements in the time it takes for you to move the BTS to an exchange and sell it) just trying to sell the collateral BTS for CNY (or USD or whatever). The main idea is that you are supposed to get approximately the fair value of the BitAsset from the market, and the price feed and force settlement is there as a last resort for holders in case the market is getting really screwy for some reason (and to make the whole peg work in the first place).

It is a problem in the community's documentation and conveying of the important details of the smart contract in plain English if people didn't understand that such a change was possible before entering into the smart contract by holding BitAssets. That is something that the BitShares community should strive to improve upon.

I do however have a concern regarding these changes that I believe I share with you. There is possibly that this change could have a significant negative effect on BitShares even if it does improve the BitCNY peg (and it is dubious whether these changes would actually make any significant improvements to the peg). This would be simply because of the fact that people didn't realize that such changes were "part of the deal" and will feel upset that the rules were changed on them (from their perspective) and maybe push them to an extreme reaction of leaving the system due to fear of what else is allowed by the blockchain to change on them that they are unaware of. That could be reason enough to not support this change (personally I am mostly on-the-fence regarding this proposal but leading towards rejecting it), at least until a good education campaign has been put in place over the course of months to make sure people understand what they are getting into with various BitShares financial contracts.

Edited post to remove my original second concern which on closer inspection was actually not a risk because any waiting-for-expiration force settling longs would get paid before the committee change review period ends and other longs (who would not initiate force settling after noticing an outrageous committee change proposal submitted to the blockchain) would just hold off on any force settlements until the committee was replaced by non-malicious members.