I do not think bitAsset holders need to pay interest.
Because BTA long side selling bts is a market behavior, they just do a normal exchange——equal value BTS to BTA. So bitAsset holders do not owe anyone.
Make the shorts and longs in equal position.
Our purpose is let the market run very long time. So the market need to keep in balance. The longs and shorts are two sides of the market. If it is not equal, the market will fail to continue some day.
Problem of BitAsset Now
Now in BitAsset, the BTA shorters have an expiring date, but the BTA holders have not. This means holding BTA have advantage than holding BTS（or the bts collateral）. So the BTA holders are winner, and BTS price is falling all the way.
Problem of BitAsset 3.0
In BitAsset 3.0, there is no solid time limit for BTA shorter too. But BTA holders have another advantage: can settle back BTS whenever they want. This leads to the same result as now.
And the settlement makes BTA not currencies any more. If we want to create BTA as currencies, then we just need to let BTA can buy BTS whenever they want.
What you called settlement seems not basic function of currencies, but some kind of bond. Correc me if I make mistakes.
For a healthy market:
if market mainly want to sell, sellers need place lower price orders to match buyers'.This leads the price to go down.
if market mainly want to buy, buyers need place higher price orders to match sellers'. This leads the price to go up.
In BitAsset 3.0, the settlement function make the market do not work normally. Hold BitAsset to get BTS, will not leads BTS price go up, but Hold BTS to get BitAsset leads BTS price to go down.
New proposal by xiahui135
Firstly, we need equal shorts' and longs' market position. So they can match each other, react to each other's action.
1、cancel short orders' time limit;
2、let shorts can cover at any amount.
Secondly, we should guarantee the system‘s safety.
3、force bad collateralized shorts to cover at a market price (like other futures)
4、the trading fee is interest, and can be paid to BTS holder (as stake holder)