Commit 8dff8663 authored by Gampe Sebastian's avatar Gampe Sebastian
Browse files

add proposal fip-0002

parent 7b357f32
......@@ -10,6 +10,7 @@ If you have any questions on how to proceed with a new or existing proposal, ple
## Proposals
| Number | Title | Author | Type | Module | Status |
| ------ | ------ | ------ | ------ | ------ | ------ |
| [0001](proposals/fip-0001.md) | FIP purpose and guidelines | FairCoin | Core | Organization | Active |
| Number | Created | Title | Author | Type | Module | Status |
| ------ | ------ | ------ | ------ | ------ | ------ | ------ |
| [0001](proposals/fip-0001.md) | 2019-03-13 | FIP purpose and guidelines | FairCoin | Core | Organization | Active |
| [0002](proposals/fip-0002.md) | 2019-01-17 | FreeVision price algorithm | Sebastian Gampe | Distribution | Markets | Active |
......@@ -4,7 +4,7 @@ Title: FIP purpose and guidelines
Author: FairCoin
Discussion-To:
Comments-URI:
Status: Draft
Status: Active
Type: Organization
Created: 2019-03-13
Updated: 2019-03-13
......
```
FIP: 0002
Title: FreeVision - price algorithm
Author: Sebastian Gampe
Discussion-To: https://t.me/joinchat/BPPPUVXXo2bC-tGI1lolMw
Comments-URI:
Type: Distribution
Module: Markets
Status: Active
Created: 2019-01-07
Updated: 2019-03-18
Scheduled: 2019-04-01
Requires:
Replaces:
Superseded-By:
Files: []
```
## Abstract
Stable FairCoin exchange prices close to the free market.
The FreeVision project repository within more details [here](https://git.fairkom.net/FairCoin/faircoin-freevision)
FreeVision price ticker [here](http://fairplayground.info/freevision/price_ticker.html)
FreeVision price ticker API [bid](http://fairplayground.info/freevision/data/ticker)
[mid](http://fairplayground.info/freevision/data/ticker_mid)
[ask](http://fairplayground.info/freevision/data/ticker_ask)
## Copyright
This FIP is licensed under the [GNU General Public License, version 3](http://www.gnu.org/licenses/gpl-3.0.html).
## Motivation
The year 2018 has shown us that the official price system didn't work very well. We couldn't solve the liquidity lacks since summer 2018 and the liquidity gap of requested exchanges for official price is huge and still growing.
The number of transactions on blockchain decrease more than 50%.
So the official price system is demonstrably a dead end and FreeVision will correct it now with the new price algorithm closer to the market.
## Rationale
Fixed price systems not close to the free market price very dependend on high reserve capital or impact investors and need to fight permanently against liquidity lacks and arbitrage traders.
FreeVision price algorithm solve this challenge.
## Specification
The FreeVision price has **bid** and **ask**.
The **ask** price will adjusted in 5% steps ( in average ) within an offset of 5%.
```
LOG_NORMALIZED_5 ( multiplier ):
1, 1.05, 1.1, 1.15, 1.2, 1.25, 1.3, 1.35, 1.4, 1.5,
1.6, 1.7, 1.8, 1.9, 2, 2.1, 2.2, 2.3, 2.4, 2.5,
2.6, 2.7, 2.8, 3, 3.25, 3.5, 3.75, 4, 4.25, 4.5,
4.75, 5, 5.25, 5.5, 6, 6.5, 7, 7.5, 8, 8.5,
9, 9.5
```
The **bid** price will adjusted in 25% steps ( in average ) within an offset of 5%.
```
LOG_NORMALIZED_25 ( multiplier ):
1, 1.25, 1.5, 1.75, 2, 2.5, 3, 3.5, 4, 5,
6, 7, 8
```
The reference prices calculating the FreeVision bid and ask price are the prices of free markets within a specific market depth ( approx. up to 1000€ ).
If the FreeVision bid or ask price is outsite the free market prices ( arbitrage trading against FreeVision exchange would be possible ) then the market depth will decreased ( in worst case down to 0 for a while )
## Backwards Compatibility
FreeVision price algorithm is in addition to the official price system.
Every user and merchant can use FreeVision price or official price or a combination of both ( for example official price for well known local people and FreeVision price by default )
A challenge will be to make both prices available on wallets without to lose ergonomy.
Either create an own instance of wallets for both price systems or add a switch in the wallet that allows it to change the price settings easily.
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