This is not fair for shorter, and the system will not work!!!!
Because people hold BITUSD can get BTS back at any time, with not market impact no matter how big the volume the settlement is.
If I'm a whale and holding a lot of BTS. And I want get more.
Here is what I need to do:
1. Keeping dump BTS in external market, at the same time buy BitUSD in internal market. This will cause the BTS price fall. (I'm a whale, and have enough BTS)
2. After the price is down more than 5%(just a example) after 24 hours. I require a settlement in internal market, this will not make BTS price up (no market impact in settlement but only 1% price gap). I will get more BTS than before Step 1.
3. Buy BTS in external market, (maybe loss a little bit BTS compared to before Step 1).
The chance is very big that the BTS I earned in step 2 is more than what I lost in step 3. Because In step 2 I will make no market impact with only 1% price gap. In step3 as the BTS price is already drag down by myself, I can buy cheap BTS, even if the price raise when I buy BTS back. It is likely the price will not raise to the price before Step 1.
The point here is the people who hold BITUSD do not need to drive the BTS price up when they convert BITUSD to BTS. (only 1% price gap to cover)
While shorter's have no chose, ever if they do not want this settlement.
Without the settlement rule, if people want convert BITUSD to BTS, they need to buy BTS with BITUSD, and it will move the BTS price up. That is what a free market behave. Settlement will not have market impact, this is the key, why BitAsset 3.0 will fail.
Settlement thing is not free market, which can be manipulated.
How do u think about this?