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General Discussion / Re: Solution to High Volatility potentially breaking the BitUSD Peg
« on: February 21, 2014, 05:02:32 am »The market will already take the locked up fees in the robot account into account as if the total XTS supply was lower. Destroying/creating and locking up / reallocating are the same thing when it comes to shares of a whole. Are you just saying one is less likely to cause problems because of exclusively psychological factors?
No. There's a little difference even considering the equivalence of destroying/creating and locking up/reallocating. Let's just use destroying and creating instead of the other two to make it more clear.
When margin call occurs, all the collateral bts is used to buy enough BitUSD to cover the short position. The current solution is that if the collateral is not enough, some bts will be created to buy BitUSD to make a total cover.
The other solution is equivalent to that if the collateral is not enough, some BitUSD will be created directly to make a total cover. There's no more market transactions to do such a cover. That will lead to a less influence on the market.