Can you elaborate more on those 'buy & burn bots'? I do not remember anything about them in your previous papers. I guess they are kind of like the buy-back that Play DAC uses for their artists shares. But that is just a guess.
bts: jshow
Well, I haven't really fully thought it through yet. But I think the best way to steadily increase the price of CFSCOIN through the income from the market making operations, will be to have a market making bot that basically does regular market making of CFSCOIN/USD, but then burns 5% of all CFSCOIN it holds every 24 hours. This would slowly reduce the supply of CFSCOIN while ensuring the bot only buys it at favorable prices, hopefully creating a relatively steady price increase/return over time for CFSCOIN.
It also occured to me that the entirety of the 30% from CFS assets could be used only to prop up the CFSCOIN market, and then all salary and payments could be done by inflating new CFSCOIN rather than using income. This could perhaps help with decentralization since the rights to inflate can be easier to control through voting.
The most important thing is that people who buy our UIA's should not be at any risk of getting their funds seized if me or someone else gets targeted.
This is going to be difficult to manage considering your operations consist of doing market making on outside exchanges. It is one thing to use multisig to protect the UIA issuer/manager from dumping a bunch of newly issued CFSAssets or CFSCOIN, but the thing that provides most of the value to CFSAssets are the cryptocurrency assets (BTC and BitAssets) that are being held by the centralized exchanges. Some of the value of CFSAssets and all of the value of CFSCOIN comes from speculation of future profits which could in theory continue without current employees if the operation was sufficiently decentralized and the BTC and BitAssets were secure.
If your future operations only consisted of market making on the BitShares blockchain, then you could (in future versions of BitShares) likely decentralize control of the BitAssets and Gateway-IOUs to smart contracts that respect the wishes of the CFSAsset and CFSCOIN stakeholders. You would still have multisig managers (likely threshold signatures for maximum decentralization to transaction size ratio) controlling the movement of those funds and placing/canceling the bid and ask orders. You would want to also hedge against volatility of any of the gateway assets (like GATEBTC, where the BTC reserves can itself be controlled in a reasonably decentralized way using multisig and/or threshold signatures) using shorts (collateralized by BitAssets) on the BitShares blockchain, where those short positions were also ultimately controlled by smart contracts (again this is a far off future version of BitShares I am talking about). You would have multisig managers controlling these assets and positions regularly (with certain programmed limits, like restricting how much money can be transferred to addresses/balances not controlled by the smart contract within a certain time window without explicit stakeholder approval, and restricting the prices allowed for the bid/ask orders within some percentage range of the price feed), but the managers or a quorum of the stakeholders could always revoke the control of the current managers if it became necessary. Then in those cases the stakeholders could find another group of managers to resume operations and elect if they can reach consensus on that slate with the necessary quorum of stakeholders.
But as long as you need to keep the cryptocurrency that you are doing market making with on a centralized exchange (which you will need to do for quite a while), that becomes a weak chain in the link in which authorities could seize those assets for whatever reason.
The counterparty risk from custodians will never disappear, however I hope it will be possible to have custodians be anonymous, yet trusted, so they can hold customer funds and trade them on centralized exchanges but cannot be targeted for seizure, or can even be detected by the exchange itself as anything other than private traders, even if CFS is declared illegal. The biggest issue with this (in addition to the anonymous trust) is that we won't be able to utilize Cryptohedge market maker discounts for the anonymous custodians, and those market maker discounts are a major part of the business model.