Ability to prevent DEX trading of specific assets (allow asset owner to enable/disable DEX trading) (Per J-Dog)

I see this feature a something that is needed to help move things forward. I think there will be plenty of asset owners who will want to prevent DEX trading.

Example: I create the COINDADDY coin and start offering it as a internal points token for users who use my site in some specific way… I then allow people to redeem those tokens internally for a $5 service. I want to prevent DEX trading of the asset so that someone can’t dump their COINDADDY asset on the DEX for less than $5.

Per Josh Unseth…

Ability to prevent DEX trading of specific assets (allow asset owner to enable/disable DEX trading)" -> WOuldn’t this be a huge problem? If they can’t trade it on the dex, then they couldn’t transfer it. If it were me, and I got some asset that wasn’t tradable but was transferrable, I’d trade some bond for that asset then have that asset transferred. Or, for to avoid the centralization, I’d just fork the DEX and remove the non-tradability of assets.

More conversation on Skype regarding this topic…

[4/3/15, 11:16:24 AM] Shannon Code (ZTC): you can transfer it manually I assume
[4/3/15, 11:16:44 AM] Shannon Code (ZTC): just prevents exchanges that support that flag to not allow public exchange trading
[4/3/15, 11:17:20 AM] joshunseth: If you can transfer it manually, you cannot bar exchange trading
[4/3/15, 11:17:34 AM] blockscan: I am somewhat a proponent of using soft rules. Its tricky for a protocol this young to accomodate all instances and requirements. In J-Dog’s case, why not implement a softrule such as that you will only honor token’s that have not been transferred.
[4/3/15, 11:18:19 AM] Shannon Code (ZTC): I have speculated using a gateway address in order to transfer legitimately
[4/3/15, 11:18:19 AM] blockscan: Its relatively easy to track whether these have been transfered or not
[4/3/15, 11:18:42 AM] blockscan: this should accomodate token use cases as vouchers, etc
[4/3/15, 11:18:44 AM] Shannon Code (ZTC): that way even tokens exchanged out of band need to be re-registered by passing through an address (like coloring them)
[4/3/15, 11:19:04 AM] joshunseth: It seems like a kind of dumb rule to implement into the protocol
[4/3/15, 11:19:12 AM] joshunseth: and should be a rule implemented by the centralized service that is using CP
[4/3/15, 11:19:21 AM] blockscan: yea… the gateway method will also work. It would allow “recyling” of tokens.
[4/3/15, 11:19:35 AM] Shannon Code (ZTC): it sounds very smart contracty to me.
[4/3/15, 11:29:37 AM] J-Dog: @junseth: I am not talking about barring trading or sending in general… just barring trading on the DEX…. certainly someone could come up with some centralized exchange and the assets could be traded there and nothing we could do to prevent it. (other than the trading/source validation checks just mentioned)
[4/3/15, 11:30:34 AM] J-Dog: but it seems like a simple thing to me… add a flag to each asset, track if it is allowed to trade on the dex, if not, don’t allow order to be placed… but then again, I could be offbase
[4/3/15, 11:31:04 AM] J-Dog: the non-trading on the DEX is not so much of a pressing issue as changing the asset properties, as that is something that is needed today.
[4/3/15, 11:31:16 AM] joshunseth: Philosophical question: what good is it if you can trade it elsewhere but not on the dex?
[4/3/15, 11:33:30 AM] J-Dog: short-term long-term solutions… short-term you can make asset owners feel more confident that their asset can’t be pumped/dumped/manipulated via the dex…. and the only way to do that would be for someone to do a decent amount of footwork to write a centralized asset exchange.
[4/3/15, 11:34:06 AM] J-Dog: Eventually someone will write a centralized asset exchange… hell, maybe even me… so it isn’t a long-term solution to prevent asset manipulation…. but it will help in the short-term I think
[4/3/15, 11:34:08 AM] Shannon Code (ZTC): in my opinion the exchange market provides an easy to manipulate (not real) representation of a token’s value. Where a utility token or receipt might not need to be on an exchange.
[4/3/15, 11:34:15 AM] joshunseth: If you can pump/dump/manipulate elsewhere, it doesn’t matter if it’s on the dex or not.
[4/3/15, 11:34:54 AM] J-Dog: you can’t easily do that now

[4/3/15, 11:57:19 AM] J-Dog: The asset reputation/feedback system is not going to solve this issue…

example… I have a bunch of FLDC and I use that to set buy/sell walls and drive the price of FLDC up, sell to the suckers, and then crash it…. lots of people get upset because they were manipulated into buying FLDC because they thought the pump was related to the project… so they see price going up and jump on board… they were scammed, so they leave negative feedback about FLDC…… we now have a situation where FLDC has hundreds of negative feedback on their FLDC asset… and this greatly impacts their project, and its ability to do good, attract new users, etc

the FLDC project had nothing to do with my pump and dump… yet, they are greatly effected by it… and a reputation system helps people scream foul, but doesn’t help FLDC re-establish their credibiity

Simple short-term solution is to disable DEX trading for FLDC… This makes it more difficult in the short-term to manipulate asset prices

Longer-term, clearly someone will build a centralized market and allow trading of non-DEX traded assets… but it would be a bit of work, and not something someone is going to do until there is decent CP/asset volumes.

I’ll stop beating the dead horse… but I fail to see why disabiling DEX trading at this point is an issue… 1) not technically tough to add another flag and check it before entering a DEX order… 2.) This will help make CP attractive to new developers who don’t want to worry about price pumps/dumps in the short-term.
[4/3/15, 11:58:35 AM] J-Dog: just using FLDC as an example since it would be effected by something like this…. I imagine they still want DEX trading :slight_smile:

IMO this is probably a bad idea entirely. But more so than that it’s not enforceable. All you’d do is force people to use off-chain exchanges. Non-transferable assets probably makes sense, though even there maybe you’d end up creating a weird market for private keys…

This is an even better point.

The volume on the DEX at this point is really not that high. Taking FLDC for the previous example, 95% of our trading is done on Poloniex, so stopping trading of FLDC on the DEX would not solve that problem in the least bit.

And going back to the COINDADDY token, if you are offering that as a $5 dollar service, then this shouldn’t matter if it is tradable or not if you are selling them to the public in the first place. Because if the price goes down, they have to give you more COINDADDY then before for your service and if the price goes up you should have more COINDADDY to sell back to the community.

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