I only support this if we first have ways of prioritizing which BitAsset yields we care about, what the yield caps for each should be, AND an ability to convert the value from fees from one BitAsset that we don't care to subsidize into BitAsset yields for the BitAsset we do care to subsidize (e.g. convert BitBTC market fees in excess of its 1% yield into BitUSD to top off the 5% BitUSD yield). Otherwise, I would hate to see BTSX inflation go towards BitAsset yields haphazardly (e.g. stupidity like 5% yield to all BitAssets). Or did you mean doing all of this manually by having the delegates purchase and burn BitAssets with their inflated BTSX stake rather than having the DAC automatically manage it?
Also, can we just use a simple linear yield (who cares if people want to spend transaction fees for compounding) so that the accounting is simpler (although I think drltc has a more complex solution that could allow for continuous compounding interest)? Meaning BitUSD funds in the reserve fund can be moved into a yield fund every block by an amount equal to a variable percentage of issued BitUSD (all except the ones in the reserve and yield funds) at the time of the block. Then the variable percentage is accumulated over each block and that sum is known for any given block. Then a transaction being moved simply requires adding a percent yield on the balance (and deducting the corresponding amount from the yield fund) where that percentage is calculated as the difference between the sum at the current block at which it is being moved and the sum at the block in which the transaction was created. This way the yield on all BitAsset balances increases monotonically. The per block percentage would of course still be variable because of all the unknowns you mentioned. However, if you really want to subsidize it to some fixed percentage, you could make sure there was enough BitAssets in the reserve fund to be able to pull out the same targeted per block percentage by first keeping considerable padding (which could also act as a black swan fund) and making up for deficiencies in refilling that fund from bid-ask overlap and BitAsset tx fees by simply buying the BitAsset on the open market with the inflated BTSX.