Refocus on BitShares DEX Credit Operations

in #bitshares6 months ago

Dear BitShares Community,

In our ongoing effort to refine credit operations on the BitShares DEX, we're addressing recent challenges and highlighting the current optimized collateral options.

Over the past two years, we've experimented with various collateral types to foster mutually beneficial credit arrangements. However, the last three quarters saw a higher-than-normal default rate. While this has been a concern, it has also provided valuable insights that have led to significant improvements in our collateral rotation strategies.

Current Credit Options:
Today, we offer two primary options for dollar-denominated credits:

BTS / BTWTY.EOS
XBTSX.WRAM / BTWTY.EOS

We believe these pairings present a highly favorable risk/reward ratio for both credit makers and takers in the current market conditions.

EOS.jpg

We're committed to continuously improving the BitShares DEX experience for all users. Your feedback and participation are invaluable in this process. Please share your thoughts and experiences with these credit options.

Thank you for your continued support.

Sincerely,

JohnR
BitShares Group

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Given that there's no network enforced punishment for defaulting, outwith the pre-agreed upon credit offer terms, the default assumption is that they will default.

AFAIK the reference UI does not offer the ability to auto repay the credit offer, unlike say the bitshares astro ui, so if they forget then they will default.

The static pre-determined collateral ratios certainly are vulnerable in even moderately volatile periods.
And I tend to agree, many borrowers are looking to take out more than they put in to the credit system. Borrowing and backing loans with LP tokens - that are continuously growing - might help tilt the calculus in favor of repayment.
Good call on the auto-repay function. Seems prudent to enable automatic payment right before expiration so borrower gets the maximum value for the credit fee.