Much of the debate around BitAssets being bootstrapped focuses around improving liquidity. Liquidity is what gives people confidence in a price and/or value. If you cannot be guaranteed a buyer ON DEMAND then spreads increase.
To gain immediate liquidity you must compromise price. The more you lower your asking price the more likely you will find an immediate buyer for the asset you wish to sell.
So the question becomes *when* do you make the decision to compromise price for liquidity?
1. At the time you buy the asset you lock in your liquidity price?
2. At the time you sell the asset you take what you can get?
Long bitAsset holders shouldn't be making the decision and whatever they get when they sell should be what they get. Aren't all trading markets like that? Are we trying to reinvent the wheel? You can't force liquidity without consequences.
The current BitAsset 2.0 system is superior to prior systems because the participants lock-in the price of liquidity-on-demand before entering the contract. As a buyer of a BitAsset I pay $1.10 for 1 BitUSD knowing I have locked in liquidity with a maximum downside of $0.10 if I need instant liquidity.
I disagree it's superior for the general protocol. We're creating something consumers won't want to use and shorters won't want to create. Can we just call this particular design BitAsset Plus/Premium/Superior/Gold Standard/Instant Liquidity or something other than just plain BitAsset? I think it's misleading and shorters are going to lose money because of the name thinking the balance is at 1:1 instead of 1:1.1 for whatever reason why they might be tempted to short in the first place.
Also can we just create another experiment with a simple plain BitAsset? It doesn't seem to me too terribly difficult to create another Smartcoin with a different design under the same committee structure.
As a short I am simultaneously pricing the cost of providing liquidity and the risk of dollars rising against my position. After assessing the risks I agree to sell short at $1.10 per BitUSD. If someone buys it from me, and then immediately demands liquidity (settlement) then I profit 10%.
The result is that any short who gets force settled is existing at FAVORABLE price, they collect the full premium relative to the price feed.
We have constructed an asset (BitUSD) that is extremely favorable for the BitUSD holder (guaranteed price floor and liquidity). To get these benefits, it comes at a price which is paid to the short. Those who claim the market is "unbalanced" and favors the BitUSD holder over the short ignore the fact that the short gets to NAME THEIR PRICE. In other words, the short gets to set the price at which BitUSD is created.
While the short gets to set the price at which BitUSD is created, they must buy back from the market to cover. This means that BitUSD holders + future shorts get to set the price at which BitUSD can be destroyed.
This means the market can function perfectly so long as all participants trade BitUSD according to supply/demand for this asset class and the parties factor in the risks.
Trading is a zero-sum game (not including subjective value externalities)... You can't say you are guaranteeing bitAsset holders liquidity without it costing something to shorts. 'Naming their price' ? Shouldn't both shorts and longs always be able to 'Name their price'.. otherwise it wouldn't be a free market? So 'naming their price' is nothing special for shorts because they would would name their price regardless if it was at the market or upon creation.
Adding Maker / Taker
I think adding a Maker / Taker market is fantastic regardless of those who are for or against forced settlement. I advocated for it before. You just get more market depth up front and visibility to how much liquidity you have in a market so count me in as a big supporter of this.
Suppose that open orders to sell BitUSD paid a yield in BTS that was significant. For a certain amount of yield we could find plenty of participants willing to short BitUSD and sell near the feed. All we need to do is define a budget and a payout equation that rewards those who are SHORT and have orders placed near the feed AND keep them there for a while. An algorithm that is also efficient to implement will be required.
The result of this would be similar to paying people to take a risk that BTS falls in value. In other words, we can arbitrarily stimulate demand to create BitUSD (ie: simulating a bull market in BTS) by guaranteeing profits to those who place orders. In principle if we could pay interest to those who are short then that would be best, but unfortunately anyone can easily short to themselves. This means that we can only pay those who keep open orders on the books near the feed. If you attempt to "short to yourself" then you fill your open order and stop earning interest.
With the right size reward the liquidity problem can be solved while keeping the costs to BTS holders fixed.
This is an over-design. We should all read the Dilbert cartoon strip about Wally and the double-handled coffee mug....