Privatized BitAssets

Privatized BitAssets

Alternatively to regular MPA like the bitUSD, BitShares also offers entrepreneurs an opportunity to create their own SmartCoins with custom parameters and a distinct set of price feed producers.

Privatized SmartCoin managers can experiment with different parameters such as collateral requirements, price feeds, force settlement delays and forced settlement fees. They also earn the trading fees from transactions the issued asset is involved in, and therefore have a financial incentive to market and promote it on the network. The entrepreneur who can discover and market the best set of parameters can earn a significant profit. The set of parameters that can be tweaked by entrepreneurs is broad enough that SmartCoins can be used to implement a fully functional prediction market with a guaranteed global settlement at a fair price, and no forced settlement before the resolution date.

Some entrepreneurs may want to experiment with SmartCoins that always trade at exactly $1.00 rather than strictly more than $1.00. They can do this by manipulating the forced settlement fee continuously such that the average trading price stays at about $1.00. By default, BitShares prefers fees set by the market, and thus opts to let the price float above $1.00, rather than fixing the price by directly manipulating the forced settlement fee.

Preparations

First, the reader should familiarize himself with the following articles:

Parameters

The relevant and interesting parameters are located in the uia flags:

{
   "witness_fed_asset" : false
   "committee_fed_asset" : false
}

Setting these two parameters to false, allows to manually define the set of feed producers (see below). Alternatively, setting either of both to true will give the corresponding entity the responsibility to produce and publish a feed.

Changing the Feed producers

The following command replaces the set of currently allowed feed producers by the new set of feed producers:

update_asset_feed_producers <symbol> ["prod-a", "prod-b"] True

Producing a Feed

We have a distinct tutorial that describes how feed are can be published: Publishing a Feed.