I have been experimenting with shorting some bitshares price stable assets into existence. I noticed just now that my position has been liquidated. It looks in this block here like the asset bitGOLD, which tracks the price of an ounce on gold, has had a "black swan" event. You can read this post on the black swan on bit20 to get a better explanation than I could possibly give.
Basically, a black swan occurs when the value of the BTS collateral backing the smart coin drop below 100%. GOLD had been in margin call for a few days now, which gave buyers a chance to sell bitGOLD at a 10% premium against the margin. Normally, this would entice speculators to short more GOLD into existence to sell into the margin call. It seems though, that in these uncertain time, noone was willing to take that risk.
Where do things go from here? bitGOLD can still be traded and settled, but no more can be created. There is currently a BSIP (bitshares improvement proposal) to reset assets affected by black swan events, so they can trade normally again. So this can theoretically be fixed on the blockchain level. But the question remains, what damage to the reputation and "brand" of bitshares assets will this do?
Well it shows the system does work as intended, that's good.
Holders got their BitGold exchanged in BTS and shorters got force settled.
I really like how it does work and as soon as BSIP-18 is in place we can deal much easier with these kind of events.
But the main thing to avoid these things remains and is to get more liquidity.
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How is it that bitgold was actually in black-swan when there appears to have been no such event, or am I missing something? Gold has not suddenly jump more than say 10% on one day or bts dropped more than say whatever percent. What actually triggered this event? Was it a highly improbable event, as it supposed to be according to Dan? Does this mean that one person can actually trigger the market into black-swan by not keeping his collateral sufficient?
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lets ask @dan @inertia and @lukestokes and @roelandp the bts witness steem witness and eos block producer :D i love how hes in all 3!
i didnt know about this bitgold event, i looked up steemit black swan to check out about the steem black swan with sbd when sbd is higher than steem etc like @picokernel talked about
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Thank you for your upvote, pass by from time to time. Regards.
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