BitShare Simulation Game Discussion (theory / economics in old thread)

[bytemaster]

This thread will be used to discuss transaction in the BitShare Simulation thread.  Questions about the rules, how they apply what transactions are valid can be asked here.

I recently updated the rules to add an additional transaction type for 'minting' the crypto-USD.

THis came will only use one sub-currency, crypto-USD.

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[greBit]

Cool, sign me up to play this game.

[bytemaster]

This game is supposed to be exploratory in nature, so lets just get going and we will clarify the rules as we go.   The KEY thing bing that what ever the rules end up being reflect actual economics *and* are implementable on a blockchain.  No rules that could not be introduced into a blockchain code will be allowed.

[greBit]

I want to purchase 100 BitShares for 60 simulated USD, send BitShares to address BS_GREBIT

[bytemaster]

Just for the sake of getting this game going, we will disconnect the relationship between between BS and sUSD and let the simulation market handle derive the price.   So I will accept your offer.  This will establish the exchange rate between BS and sUSD to bd 100 BS to 60 USD and thus we have our starting price.

[nomailing]

nice. I also want to participate. I hope your concept will work out although everyone is quite skeptical about it

I want to purchase 100 BitShares for 60 simulated USD, send BitShares to address nomailing1.
I want to purchase 10 Crypto-USD for 10 simulated USD if on average 1 Crypto-USD is backed by at least 0.9 BitShare. send CryptoUSD to address nomailing1.

I assume I can add this condition in my second order to be sure that the crypto-USD is backed by enough bitshares, right?

[bytemaster]

nomailing:  thanks for joining.  As both of your offers involve sUSD they cannot go into the blockchain, so we will pretend they were posted on craigslist.

What you are really saying is that you want to buy crypto-USD provided its value is near par with sUSD.    The last trade established sUSD to be worth 0.6 BS, therefore a crypto-USD could be issued for 0.6 BS and have parity.   If you would like to purchase some crypto-USD, I will gladly mint some for you at 0.55 BS.

[bytemaster]

I have updated the transaction table for the game.  

Bytemaster has an open offer to mint up to 10 crypto-USD earning interest equal to the dividends from  0.6 BS per crypto-USD and I will sell them for 65 sUSD.

[nomailing]

nomailing:  thanks for joining.  As both of your offers involve sUSD they cannot go into the blockchain, so we will pretend they were posted on craigslist.

What you are really saying is that you want to buy crypto-USD provided its value is near par with sUSD.    The last trade established sUSD to be worth 0.6 BS, therefore a crypto-USD could be issued for 0.6 BS and have parity.   If you would like to purchase some crypto-USD, I will gladly mint some for you at 0.55 BS.

ahh Ok, thanks.
I will accept that. So I pay you 10sUSD for 10 cryptoUSD (minted at 0.55 BS).

[bytemaster]

THis is a learning experience for me as well, so I hope you can bear with me.  A more natural way for me to express my offer is to say I will offer you 1 crypto-USD, lets just use cUSD for short in exchange for 1 sUSD earning 0.055 BS / year interest.   

[bytemaster]

Bytemaster is looking to get back into crypto-USD, so makes an offer IN THE BLOCKCHAIN to buy  10 cUSD for   5 BS   and pay a 0.1BS transaction fee.


(Note your goal in all of these trades is to cause sUSD / cUSD to diverge from 1.0 and not recover)

[greBit]

I want to purchase 20 cUSD for 8 BS

[bytemaster]

Your bid has been posted in the block chain and it cost you .1 BS transaction fee.

[bytemaster]

Guys, I am open to advice on how to clean up the transaction thread... to make it easier to understand the market...

Lets quote all prices in terms of BS.   So say you want to Buy 20 cUSD at 0.4 BS.  THat way we don't all have to re-normalize our orders.

So my analysis of the market is that no one is currently looking to buy crypto-USD because all offers to buy cUSD are below market value. 

So what are the bids do we have for sUSD to buy or sell? So what is going on with sUSD... anyone want more BS or perhaps to sell the BS you have and start earning 10% interest on your USD outside the chain?   Currently the interest rate being paid on cryptoUSD is .055 / .6 = 9% / year... so you could sell your cUSD now and start making more money the next dividend period.

[nomailing]

Still not quite sure how I should formulate it, if I want to mint some cUSD to myself. I will try it like this:

I want to purchase 20 cUSD for 5 BS.
I want to mint 20 cUSD (backed by 5 BS) in response to the highest bid.
*EDIT* is it possible to add a limit to my second order?


So I will back 1 cUSD with 0.25 mBS, right?
(btw, please correct my balance: subtract the 10 sUSD that I paid to you for the 10 cUSD)

[bytemaster]

Thanks for the correction, the balance is updated.

Well, what you really want to do is buy cUSD so you need to place a bid.    

So, let me place that bid in the chain for you.   Buy 20 cUSD @ .25 BS

[bytemaster]

So what we have going on here is everyone wants to buy cUSD at a bargain... and no one is willing to sell their cUSD at a loss.

[nomailing]

Guys, I am open to advice on how to clean up the transaction thread... to make it easier to understand the market...

I would suggest to format the mortgage as MBS instead of mBS so that there is no confusion with milliBS. *EDIT* or some other letter.

[bytemaster]

So lets try to play some game theory here... go ahead and tell me your strategy for getting cUSD to be different than sUSD.

Perhaps we can attempt to do some 'rapid' transactions that make sense for all parties and will move the price.

[nomailing]

Ok, because at the moment there are no sell order, I will try to make a profit by setting some high price:

Sell 10 cUSD @ 1 BS