Proposol by ALT:The controlled enhancement for PEG

[Ggozzo]

What is BTA?

[zerosum]

That's what the market need - Communist planning.

Hooray! Hooray!

[Ander]

Honestly I think the only missing ingredient to the PEG working exactly as we want it too is that we need more liquidity/traders/market makers.   Once bitshares grows the peg will get very strong.

[btswildpig]

Proposol by ALT:The controlled enhancement for PEG

Although I think the peg theory works , the fluctuation is not much , and you can always sell the peg asset for BTS at the open market rate according to the price feed within 30 days .
But this kind of effort is not that acceptable in the eyes of the general public . Because the peg demand from the public is that it can be converted to fiat at all time for 1:1 .

So , what's causing the difference between the ideal demand and the reality ?

1. Generally speaking , the people who believed in the peg should have incentive to provide 1:1 exchange for fees . Why didn't they ? Because they can't be sure they should put in how much fiat money for this kind of exchange  . If the issuing amount of BTA is to much for the market to bear , then the people who provide this exchange service would have a lot of BTA but no fiat money .

2 . Even if some one provide such a exchange service , the issuing amount still can not meet the demand if the issuing amount is too small (comparing to the potential demand .).  For example , there are just 0.4 million BitCNY now , major exchanges would not consider to use it as some sort of redeem code to be a on-ramp or off-ramp . If too many people on the market don't think the price of BTS will rise , they don't have the incentive to issue new BTA .

So , as we can see , these two issues are related to the issuing amount .  Because if the issuing amount is unpredictable , it leads to uncertainty for those who offer to exchange it with fiat .

But what if we can control the issuing amount base on market demand ? The delegates can feed a maximum and minimum amount for the issuing of BTA according to the actual demand for BitCNY and the need for circulation .

When the issuing amount is lower than the minimum amount , the system encourages the shorts to execute by a discount on interest or lift the limit for the short order to expire after 30 days .

When the issuing amount higher than the maximum limit , the short orders should not be execute .

Because being an simple exchange between fiat and BTA is profitable , those who want to provide such service should gave financial proof to the public , the delegates gather those numbers to provide maximum demand parameters for the system.

Those who want to hold and use BTA , should provide their demand for BTA as well , so the delegates can gather them to provide minimum demand parameters for the system .

I believe this way we can have a lot of individuals who will exchange BTA for fiat , and merchants who will use BTA as a payment tool.