If Nu were to be done again? A better system?

[MatthewLM]

i can get as many shares at that price as i want

Only for as many UltraCoins as you have.

can use this fact to manipulate the system

How? The only issues I can think of are when those that convert and trade coins do so more quickly than the market can adjust. A restriction can be placed on how quickly converted coins can be used to avoid such issues. Maybe I’m missing something but you have to spell it out for me.

@Sabreiib I might not have understood everything you suggest. But you say that Shareholders can borrow HYK from the protocol as long as they pledge a certain value of shares that needs to be at least x percentage of the HYK value. Then they can sell the HYK but need to repurchase them to pay back the debt. Then they can then roll over the debt as long as they ensure they can keep enough collateral.

How is a peg ultimately enforced this way? When the value of HYK rises, reduce the collateral requirement to allow more sales, and when it falls, increase the requirement? It sounds like your system is happy to allow some leeway in the peg as the peg is controlled by responding to market conditions rather than creating market conditions. Or it sounds like your system is designed to create a controlled rise in the HYK price as opposed to creating a dollar peg.

[Nagalim]

A restriction can be placed on how quickly converted coins

So now you’re changing the rules based on order books on exchange, another thing that can be manipulated. If you have a dominant market on the blockchain that becomes more important than the markets on 3rd party exchanges you will always have issues trying to do this. Creating artificial regulations to prevent trade will only add to the complexity without solving the core problem. The solution bts uses to this core problem is to make the dex market self-creating for bids and asks. Im not trying to advocate for bts, im just saying they went the route they did for a reason and you should try to understand the problems they were solving because bts was one of the first to use oracles to determine price for virtual assets. If you go that route you’ll likely run into the same sorts of problems.

[MatthewLM]

changing the rules based on order books on exchange

I don’t see how that relates to delaying the conversion.

you have a dominant market on the blockchain that becomes more important than the markets on 3rd party

Outside exchanges will remain vital for trade to and from outside assets such as Bitcoin. The prices would be based upon these outside markets. The price cannot be determined by the markets between UltraCoins and UltraShares. The internal market is not fluid, it will be fixed to the price recorded by oracles.

I’ve read about BitShares multiple times and nowhere does it really explain why such a complicated mechanism is necessary and what the problem with my system is. I seems the system is designed to promote adoption by providing not only a peg system but a speculation system to encourage traders. I’ve not seen my system proposed anywhere except with Steem dollars that has a similar system but only has a conversion system one way (steem dollars to steem).

Steem dollars would have worked better if it wasn’t for the extreme Steem depreciation.

Edit: Also steem uses an average (7 days I think) for the price calculations which does not keep a continuously accurate peg.

[Sabreiib]

@Sabreiib I might not have understood everything you suggest. But you say that Shareholders can borrow HYK from the protocol as long as they pledge a certain value of shares that needs to be at least x percentage of the HYK value. Then they can sell the HYK but need to repurchase them to pay back the debt. Then they can then roll over the debt as long as they ensure they can keep enough collateral.

How is a peg ultimately enforced this way? When the value of HYK rises, reduce the collateral requirement to allow more sales, and when it falls, increase the requirement? It sounds like your system is happy to allow some leeway in the peg as the peg is controlled by responding to market conditions rather than creating market conditions. Or it sounds like your system is designed to create a controlled rise in the HYK price as opposed to creating a dollar peg.

Hayek money and NBT can share the exact same pegging mechanism, the only difference is HYK pegging price increasing slowly per year/month/week, while NBT is constant at $1.

E.g. If we issue HYK at 2017 with $1, till 2018, 1HYK=$1.03, in 2019 1HYK =$1.05, etc. We adjust the HYK price as per real world CPI.

Last but not least, Iiquidity providers must pledge such as $2000-4000 of shares to borrow 1000 HYK form protocol, our goal is to maintain the share price, and promote it when our coins business gets bigger, finally, our shares are just BTC, more and more valueable.

[MatthewLM]

Maybe Hayek would be suitable for a relatively stable, gradually deflating currency. Though what I wonder about in this thread is something which can be pegged directly to another currency.

I think I know what @Nagalim was suggesting now. What about people manipulating external markets to temporarily lower or increase the share price? I don’t see how BitShares solves that though, as the share price has to be fluid.

If conversions were done 1. gradually over time and/or 2. at a random point in the future, then it would become much harder and more expensive for someone to reliably manipulate the price over such a period of time.

[Sabreiib]

Hayek’s method can support hayek money, leave along a USD pegged currency.

It’s easier to maintain NBT than maintaining a Hayek money.