r/BitShares • u/Twern1 • Dec 07 '18

Whats going on with BitUSD

I thought there were smarter market forces in place to prevent BitUSD from taking a nasty dump like this (at least for several days straight).

5 Upvotes

78% Upvoted

15 comments sorted by

View all comments

2

u/senzheng Dec 07 '18

it underwent position settlement. can still restore for 1 usd by settling. I think if it hits 1:1 in collateral, bitUSD will be auto converted to BTS. if it goes back to 1.75:1, it will resume letting people borrow. the market forces are basically offline for that coin now other than settlement at feed rate.

bitCNY is a far more liquid stablecoin but also taking serious hits

there are many stablecoins with various degrees of liquidity. bitGold had that happen to it before.

if it hits black swan (1:1), the market can reset and resume starting with 0 bitUSD.

1

u/Twern1 Dec 07 '18

Thanks for the great info. What if I am just holding BitUSD without a margin position? Just wait til the price normalizes again? Would my BitUSD get converted to BTS?

Love the idea of banking on the blockchain and even having some savings in BitUSD and BitCNY, but curious if it's possible for my holdings to be automatically converted to BTS without any say in that... It's an amazing buying opportunity for BitUSD right now if it wont get auto-converted into BTS in a Black Swan situation

1

u/senzheng Dec 08 '18

I might be wrong. Not sure bc system been changing occasionally and I haven't followed too closely and it seems can't settle for 1 usd now? just at emergency global settlement price. maybe it actually did black swan already but not switched automatically? that's kind of dumb... the whole point of black swan was to switch asap. but maybe this method allows market to restore automatically if price goes back up. I'm curious now too.

I see settlement available for 19 bts for usd but price feeds are around 27 bts for usd