BAIP8: Set Force Settlement Fee

BAIP: 0009
Title:Set Force Settlement Fee
Authors: bitcrab
Status: Draft
Type: Consensus 
Created: 2020-8-14

Abstract

This BAIP can be seen as a subsequent optimization of BAIP2, it propose to feed price as the highest of current market price and the 24 hours moving average price.

Motivation

In the past several days, force settlement happened more intensively than before, the background is that something made BTS attracted more attentions and BTS price went above 0.22CNY - which is the voted threshold per BSIP76, as stated in BSIP87, almost all the users agree that the settler need to pay more cost while executing force settlement, and the cost will be paid to system as fee.

Rational

Now there are 2 parameters for force settlement: Force Settlement Fee Percentage(FSFP) and Force Settlement Offset(FSO) for each smartcoin, both are controlled by the smartcoin owner.

When a force settlement is executed, the buyer sells smartcoin with quantity X and get collateral in quantity X*(1-FSO)*(1-FSFP)/feed price price, the settled debt position owner sells collateral in quantity X*(1-FSO)/feed price* and get smartcoin in quantity X, the delta in paid and received collateral in quantity X*FSFP*(1-FSO)/feed price* will be paid to the owner of the smartcoin as force settlement fee.

In this scenario, as a price offset parameter, FSO is irrelevant to fee charging, it just define force settlement price = feed price/(1-FSO). and the force settlement fee is paid in collateral and the amount is calculated out based on force settlement price and FSFP.

Specifications Set Force Settlement Fee Percent as below: bitCNY: set FSFP=1%, FSO = 1%, another option is to just set FSFP=1% bitUSD: set FSFP=1% bitEUR: set FSFP=1%

Explanation

currently FSO(force settlement offset) of the 4 main bitAssets are all 1% except that bitCNY has a FSO of 2%, reduce FSO as 1% and at the same time set a 1% FSFP will make force settlement price almost unchanged.

Discussion

https://bitsharestalk.org/index.php?topic=32539.0

Copyright

This document is placed in the public domain.

bitshares / baips