Market settings changes

Hello dear traders and investors,

Bit20 has been evolving nicely since it's inception in December 2016. We are happy to observe that traders are buying and selling much higher than the "theoric" index price.

Why is that ?

Well, simply because they saw what Bit20 has performed very well in the last 18 months and deduce they can buy it even with a 50% premium, it's still a good investment with lots of potentials.

This market has been created with some very specific settings. These settings have been adjusted before the market was born.
Now that we have seen the price stabilising around 140% of the theoric asset price, we can adjust the market settings to fit better its trading environment.

2 changes:

The MSSR: When a shorter have its collateral falling below 175% of the price feed, a margin call will happen. A buy order will be automatically created in the market to buy back its undercollateralized asset(s).
This process guarantee that all smartcoins on the BitShares decentralised exchange are always well collateralised.

The MSSR is set at 110% at the moment. This would be good for gold or dollars because they are traded close to the price feed. No need then to buy back much higher.

In our Bit20 market, the asset is traded around 140% of the price feed. A buy back at 110% wouldn't be bought anytime soon. We will increase this value progressively until it reaches a value where it can be bought. It will be somewhere between 120% and 140%

What does it change for you concretely?

Really not much.

For the buyer, nothing at all.

For the shorter, you still can borrow BTWTY with the usual 175% collateral, the only difference is the price of the margin call if your collateral falls under the limit. If you are aware of what you do when you short BTWTY, that limit shouldn't be reached. If it is, the price you will be margin call will probably be around the one you sold and maybe cheaper, the spread is still wide. We won't raise this value until the point it is discouraging shorters, our goal is to incentive as many as possible!

Second change. After receiving some requests, we will enable the force settlement setting.
This option allows anyone with BTWTYs to force the market to buy the asset(s) they own at the price feed. The fact that this market is traded much higher than the theoric price feed make this option irrelevant because it's  easy to sell at a better price than the price feed.  

In order to let everyone consider this information, we will wait for 48h before operating any change.

Happy trading!