The Beached Whale and the End of an All Out Algo War:
Two Market Makers Come Clean through Open Source
Steemians!
It's @jasonmcz again from Firstblood.io, I am writing this post along with my co-worker @zackcoburn , who's the other market maker in this post. We hate to say this but unfortunately this will be the LAST chapter of the trilogy on our voyage in making market here. If you missed my previous blogs on this topic, you may go to these two links to catch up: Chapter I and Chapter II. (Reading those posts can certainly get you caught up on some of the topics I will be discussing today.)
The Fork and The Pre-Closure
I think some of you here would agree with me that Market Making is a fun activity. Why? Because it involves a lot of problem solving skills and you can learn from what your opponents are doing by watching how they are posting their orders on the orderbook and how they react to you when your fresh orders hit the book. Also it makes you money!
$$$$$$$. The kind that buys you stuff.
And something changed all of these on our internal market, it was an UTC timestamp.
2016-07-26T15:00:00 UTC (11:00:00 EDT)
It was this UTC time stamp marked the end of Algo Wars and Liquidity Points Race because the new update is taking out of the very same liquidity reward that got most market makers in this game at first place.
Although, it seems like every market maker that we know all saw this coming sooner or later because it was over-due for putting a stop on that flawed reward system.
537 hours and 537 Payouts
| 441 | @abit |
| 67 | @complexring |
| 8 | @hopeless/@inbamn |
| 4 | @grumlin |
| 3 | @jl777/taker |
| 3 | @xeldal |
| 2 | @tinfoilfedora |
| 1 | @anonbtc2 |
| 1 | @chitty |
| 1 | @creator |
| 1 | @cryptogee |
| 1 | @james-show |
| 1 | @jasonmcz |
| 1 | @smooth-a |
| 1 | @steemit200 |
| 1 | @steempower |
Couple market makers did well and some didn't, and by some, I meant MOST. As you can see on this chart, how Liquidity King @abit gamed away 441 rewards or 82.12% of the total out the system.
Using a 7 day moving average of $3.13/Steem that's whopping $1,656,396 worth of liquid steem although of course he wasn't able to get that much because he's losing spread on doing every (wash) round trip against himself and others -- such as @jasonmcz , @zackcoburn, @jl777, @complexring and many more.
Final Hours and End of an All Out Algo War
As a prop trader for last 7 years, I gave the very last hour of every trading day a name -- power hour -- because anything could happen during that last hour, whales could be buying up, speculators could surge on the volume and better-informed traders/hedge funds could be loading up interesting shit that one one ever heard of before a major event hits the press. STEEMIT Internal Market is no exception, it had its very own version of it and it's pretty damn bloody.
Before that UTC timestamp, it was a battle field.
Here is a snapshot of what happened before the fork:
- @abit was wrecking up 10,000 - 20,000 STEEM orders occasionally, both on the bid and ask, which left the rest of the market makers with no choice but to give up. Props to him, he really stepped up his game in the final hours! The liquidity points was in the 20MM level as opposed to 2-3MM normally.
- @complexring and I were monitoring market closely looking for a chance to fight back on the liquidity ladder. Remembered clearly one night we saw @abit went offline, we thought we had a chance to climb up but quickly discovered our orders were blocked by @abit's great wall again.
- @jl777 and his @taker (maker) were posting 77.00 STEEM all over the place, climbing up the ladder slowly but efficiently although later on he confirmed he lost a bunch of money by using this strategy.
- And others have already given up....
The End & The Open Source
With no liquidity reward and quickly discovered lack of trading volume on internal market (perhaps more in the future when STEEM grows its community), we've decided to take a break from making the market on the internal exchange. As of today, I have 'undeployed' all my capital from the orderbook and we have officially open sourced our retired bots to github.
You may now fork it or clone it from this link:
https://github.com/zackcoburn/steembot
Requirements:
-python3
-https://github.com/xeroc/python-steemlib
special thanks to @xeroc for his amazing libirary
How to run:
To run Steembot, modify run.sh with your username and private key. Then run sh run.sh.
Hopefully this open source will open up to those people who might be interested in making some extra cash from spread collecting and in doing good for the community by providing liquidity on the book!
Nice post. Many are not aware of the many different aspects of Steem. It is good to hear how things look from the trading and market making perspective.
Thanks @smooth, you played a important part in this as well. Hope we can find a resolution to this issue before the next hardfork soon.
good job
keep wacthing this post :D
It is a very important thing to test steemit network, and investigate it's behavior while big market fluctuations, new changes coming in , etc. It will tell us later, if steem is strong enough to resist any other bad events.
check it out and vote me pls
https://steemit.com/travel/@chicken1990/tens-of-thousands-of-islands
Thank you for sharing
Thanks for your clear position on this matter as well as the info. Thrive on and namaste :)
Thanks, I wish i had more technical knowledge to understand better, need to study more :)
@renk read my previous posts! You will be able to put the picture together!
yes me too... :-)
Super Awesome... It was a bit hard at first but after diving into the rabbit hole reading all your previous issues, I learned a lot.
I can see why its fun being a market maker. It gets your adrenaline rushing and you're getting paid.
Really hoping for a more optimal solution that would benefit the future of the community though.
looking forward to your mag this weekend!
An end to the flawed liquidity system. Next step the curation game ... inch by inch
Great post. I've started reading through your previous posts to edumacate myself. But I'm still stuck on the kimchee recipe. I love good kimchee. mmmmmmmmmmmmmmmmm.....
Hahahahahaha @gikitiki make sure you try that at home! Kimchi is really good!
Great article, always learning something new here :) Thanks for sharing your knowledge! Love it! Alla x
Hi @allayummyfood Thanks for the support! Loved your youtube videos!
thanks a lot :)
This is so interesting. I'm gonna read the other posts aswell. Thanks for sharing. I'm very very new to all of this.
I noticed that you are sensible guy by only one your comment.
this one:
I immidiately upvoted it, and went to see your posts, because thought it must be as good as your comment.
And I was right. Thank you for what you doing.
It's nice to realize that our community has such smart people on board. Keep doing what you do.
@alextsvirko Thank you for your kind words! Have been devoting quite a bit of my time into steemit lately, from market making ,writing articles to contributing to the git and promoting my own project! I have to say this community is pretty awesome!
Im always promoting steemit on different promotional tools. But, none appreciates my effort. I will be posting my next promotion of steem. If its still a failure. I will stop doing it. I care about the steem but it seems steem dont care at all.
awesome work , thanks for sharing that with us.
Hi man. You're a prop trader? I just started out daytrading recently, and am up about +70% this year on my trades, +83% the year before, and I have heard of prop trading and prop firms, and would love to learn more and potentially trade for a firm. In fact, yesterday was my last day of work at my office, as I move to trading full-time. But I don't have a lot of capital to trade with, so prop trading would be really ideal. Can you offer any advice or assistance or anything to set me along the right course?
I have been making stock watchlists:
https://steemit.com/investment/@nuttindabutt69/top-4-stocks-for-tomorrow-with-annotated-charts
https://steemit.com/money/@nuttindabutt69/3-stocks-for-fri-7-29
Thanks in advance for your help matey. I admire your entrepreneurialist spirit. It must take quite some cojones to become a market maker in a brand new digital currency world.
All the best,
Nutt
Would love to! Just hit me up on the chat we will DM each other!
@jasonmcz Hey this is great news about opening your bots up! As a person who primarily makes their money on building and selling customized trading bots I'm always as excited as a school girl on prom night when I find someone opening up like this.
I've been trying to get people to see that the real solution to "the other bot problem" is to accept the bots, but give the developers better tools and knowledge upgrades so they use bots in a responsible and productive manner.
To that effect we've created STEEMBOTS as a way to gather and disseminate "best practice" information.
I'm really hoping you'll stop by and visit. The intro post I linked, focuses mostly on chatterbot issues. But any sort of bot is welcome there. Kind of like a pet adoption agency. We hope to help people find their perfect pet, err bot.
Either way, this is some really compelling content and it's sad to see you leave the internal exchange. We need more good traders in there, especially market makers. Fascinating analysis, upvoting because I believe this is exactly the kind of content we need here!
I've missed something. There's no liquidity rewards anymore?
No since the last hard fork. Abut a week ago.
I'm sure they are somewhere but I do wish all these frequent rule changes were listed somewhere more prominently on the site.
Awesome reading all your previous issues. I learned a lot.
Nice post
nice post n this my dream office @jasonmcz
Great job. You are right the only way steem will work is if millions of people join.
up vote for u
vote for me pls
https://steemit.com/travel/@chicken1990/tens-of-thousands-of-islands
I get to know better. Nice knowledgeable article
like
like
very good
Nice @jasonmcz
Shot you an Upvote :)
!cheetah replyban
Okay, I have reply banned @countrytalented.
Keep up the great work @jasonmcz
Upvoted
!cheetah replyban
Okay, I have reply banned @cheremet.
Do what you feel is best. That's the only way to live. Thanks for your work!
It is good to hear some inside perspective
Thanks for sharing, still take time for me to get all the picture but this OK steemit made me like reading and think. :)
@abit sure made it hard for the rest of us hehe... well done to him, he programmed an amazing bot and provided a lot of liquidity... not sure if it is a coincidence that price is dropping since liquidity rewards were taken off?..mmmm...
In the last days I was doing it manually..
Thank you!
Great working
Like skydiving for techies. Pure adrenaline is market making!
great post, thank you!
👍nice info, keep up ur work....
I'm enjoy reading ur analysis again, Jason. Thank you!
Great job....
ImportError: No module named 'grapheneapi'
Smooth sneaking in there for a little money changing I see
¨...quickly discovered our orders were blocked by @abit's great wall again. ¨
lol, @abit must be Chinese, they know how to build great walls :)
super!
nice post its a good info for new steemers... keep it coming....
Thanks for the inside view. I read jl777 take yesterday where he was saying he didn't fair so well
wow nice! good job
What an amazing move to make.
And what a great finale to the saga! Applause to all actors.
The Beached Whale...
Awesome post I love the steemit politics and stuff!
My Profile
About Me: Hello, My name is mark I am the creator of this post. This is an example profile post and a little info about me and who I am. Please reply in my thread or start a new " Submit your Story" and don't forget to link back to my official post the " Steemit Profile Challenge " please follow this link for more info: https://steemit.com/profile/@bitminter/steemit-profile-pic-challenge Thank you for your support!
!cheetah replyban
Okay, I have reply banned @abctrade.