My understanding of what the OP is suggesting is not a UIA structure an an alternative to MIAs, but as a way to pool trading strategies that gives added liquidity and support to MIAs.
That was my idea, yeah. 'Celebrity' traders could issue UIA's that allow users to benefit from their trading strategy. This would mean that adept traders could advertise and sell BitShares for us, as they profit themselves directly. These trader UIA's would then compete and eventually a stable few will demonstrate steady returns. These particular UIA's could then be bundled into a trader-UIA-Index that tracks the top performing traders.
1. MIAs earn fees only for BitShares and nobody else
2. Assets issued must be collateralize with BTS to short the Asset into existence. This means they have real value backing them.
3. They rely on delegates to provide feed data to supply the market value of the Asset. You need at least 51 of the 101 feeding it.
In this scenario, there is no need for the complexity of fund managers to trust whats going on behind the Asset.
This is probably the way to go for now.
The difficulty I see is that if the index is comprised of 5-20 other coins then it might be difficult to 'take delivery' for arbitrage opportunities.
I'm wondering how well the peg will hold.
Lets says this INDEX tracks the value of the top 4 Crypto's.
Could the funds held in the INDEX be used to provide liquidity for a bridge service (like metaexchange) so that the INDEX MPI can be traded in one go for 25% of each crypto.
That way arbitrage can be kept within the bts economy, and the peg for the index has another price finding mechanism.
Perhaps the profits for providing this liquidity could be split between the MPI and the bridge service provider.
Permie, I like your goal. A scope limit I see with this specific approach is how to audit the traders that are using external markets to ensure they are not absconding with funds. If this is not auditable, you would need to limit their activity to arbitrage and market making on internal exchanges, and not give them any power to withdraw funds from the pool they are managing, only the power to trade it.
Profit from market making and arbitrage on the internal market would be great. I'm imagining an index that can profit a few % every week/month from low risk trades that provide a service to the ecosystem (liquidity?).
How could trades be limited?
Wouldn't that require just as much effort as monitoring traders? Delegates would have to constantly sign multisig transactions?
Unless special 'trading accounts' can be made at participating services such as Metaexchange or Blocktrades. Perhaps a single master public key is permitted for the traders to use on each of these bridges.
Another approach I see is to divide the funds amongst 101 traders.
For arguments sake let's say that the each day all the traders return funds to a multisig address so that funds can be audited and that the risk of more than 3 traders not returning funds is less than 1%.
This means a 1% risk of a 4% loss of funds (assuming honest traders make risk-free profit).
If the profit made by the 96 remaining honest traders is greater than the 4% loss, then the fund is in profit.
Auditing each trader costs money, the cost of auditing is potentially more than the risk of rogue trading.
Mitigating risk by requiring traders to have an online reputation or some form of collateral would increase profits but without the on-going expense of auditing traders.