This is my understanding, it may not be perfect. (or what your asking might have gone over my head)
but fuck it I'll give this a shot.
What is the incentive for order books to track the true value of a real world asset?
There is no incentive, everyone knows that everyone else is going to expect the price to follow whatever asset it's pegged to, so if they catch it on a fluctuation they will buy or sell accordingly in anticipation of profit.
Is it an issue that 2x of equity must be pledged to get 1x of a particular Bitasset?
The person shorting it is who puts up the collateral. Unless they let it ride long enough for a margin call, they get all their collateral back when they buy some bitAsset from where ever and repurchase their collateral.
They don't get the bitAsset though, that's what they're shorting. The system just creates it when they short it, and matches it to somebody who wants to buy the bitAsset from the person doing the shorting (so they get half their collateral back on the spot). so they're really only putting up 1x collateral. (then if the bitAsset price drops they can buy the amount of bitAsset necessary to cover their short position for less than it would have cost to buy when they shorted, and wind up with 2.5x more btsx than they would have, but they also risk losing that much if bitAsset price rises)
What is the effect of a liquidations due to volatility?
price temporarily drops, people crap their pants that they can buy a dollar for less than a dollar, price goes up from those people buying.
in the early stages, there wont be enough market depth for the peg to track the price consistently because it'll be so easy to alter the market, so a feed will need to be temporarily implemented to halt trading at 30% above or below the asset's price... until market depth is such that the bitAsset will be able to stand on it's own. think of that as bitAsset training wheels.
I get the feeling everyone thinks asset value tracking will be awesome, but no one understands how it is supposed to work and what its chance of success is.
I think it will be awesome. After struggling back and forth with toast and tonyk in a different thread I think I finally wrapped my head around it. Chance of success? well it IS experimental, but BM mentioned in a thread that an accredited professor of economics has evaluated his ideas on this and declared them sounds (not that he needed that, he explained, but he wanted to silence the critics who would tell him that he's no economist)
edit: I actually tried to write an article about this. here it is
also this thread
will show you all the beating of my head into the keyboard I had to do to understand.