I conclude that BitShares itself should NEVER every run a LMSR market maker.
BUT: we could have a feature that let's others provide funds for the market maker und still offer the prediction market in a decentralized manner.
This could indeed be built into the protocol to remove the trust that would be required if someone just put a buy and a sell wall at the LMSR price.
How can you not find putting an arbitrary market maker in the blockchain itself genius?
Not sure if this is a rhetorical question
I'll answer it anyways:
putting a market maker on the blockchain makes sense in blockchains that have a means of handling a loss (read: can dilute their shares to pay the market maker)
Since BitShares has had (and still has) it's issues with "dilution" or coin "earning", I think we should not let the BitShares blockchain/protocol itself run the market maker, but the blockchain could offer others to fund the market maker on a loss.
Or, alternatively (stupid approach ahead), we could force the market maker not to make a loss and cut profits from customers in the event of "bad luck" for the maker