It has been suggested before that BitAssets with feeds produced by private parties would enable greater variety of BitAssets to be created. I would like to explore this idea further from the perspective of growing adoption.
Today there is little incentive to market BitUSD because 100% of the profits of marketing BitUSD go to USD holders via yield or BTS holders via trading fees. If BitUSD were a privately owned asset then the manager of that asset (responsible for publishing the price feed) could make money directly proportional to adoption. Assume the manager got to set the market trading fees/transfer fees just like they can with any other user issued asset.
The end result would be a financial incentive to get a pegged asset released, marketed, and adopted. The BTS network would profit by having the asset trading against BTS and other assets. Initially this would result in a handful of attempts, but market competition would result in the best promoted and adopted variant having the highest usage and deepest markets. Ultimately the market would settle on one or two variants and the rest would die off or be special purpose.
1) Assume anyone could create a BitAsset and publish a feed for it.
2) Assume that "anyone" could be a group of 100+ individuals which are unlikely to collude and they must agree on the feed via multi-sig.
3) Assume that this group got to set the trading fees (%) on all trading volume with the asset.
So the question is, are delegates inherently more trustworthy than any other group of individuals collaborating to publish a trusted feed? Sure they are elected, but an election is not the only or even the best way to establish trust.
So I contend that a market full of private market pegged assets with profit motive for a near "winner takes all" on the team that can provide the highest liquidity and best marketed variant will produce better results than relying on socialized funding of the BitAssets produced by delegates.
Thoughts?
I am not a lawyer but...
I believe that doing this would consolidate and centralize the market rapidly into the hands of a few well heeled players. The appeal of bitUSD would diminish quickly as any properly incorporated entity with the resources to pull this off would immediately be subject to AML/KYC regulations and would be forced to lock down the bitUSD holdings of anyone the IRS asked them to.
Assuming that they could sustain the compliance burden, they would also find themselves immediately subject to US laws regarding virtual currency & money transmission.
http://www.fincen.gov/financial_institutions/msb/msb.registration.html (click the links labeled Regulation & FactSheet)
If they didn't comply then FinCEN could seize the company's assets globally, pretty much immediately.
Doing it without incorporation, for instance as a DAC would mean that in theory, USA courts would disregard the DAC and treat the players as individuals who were operating a series of sole-props and engaging in a regulated activity (money transmission and investing/banking). 100% of the liability would likely rest with the players severally and I have serious doubts that the USA wouldn't treat everyone in the market under RICO statutes and seize their individual assets and likely their personages.
In short, if you want to do this, don't live anywhere near the USA and don't expect to be able to board an airplane any time in the near future.
Other than that it's a great idea!