For instance, according to Peter Conrad, the current situation may well
be achieved by using the actualy/fair price feed and a short squeeze
protection ratio of 0%. That would lead to margin calls to execute at
the price feed instead of additional penalty of additional 10%. The only
drawback (that might not be one) is that the short protection ratio
cannot be negative. That means that in case there is a margin call
pending in the books, people that want bitUSD will provide a "premium"
to the market to snatch bitUSD from the margin calls.
If this becomes a problem, the price feed could still be "modified", but
at all other times, the price feed would reflect the fair price.
From what I understand, the MSSR being >0 actually serves the purpose of offsetting the risk of holding smartcoins from going into global settlement mode. In global settlement mode, the smartcoin won't be properly pegged anymore.
The current MSSR seems to be a balancing act to make global settlement mode much less likely, as the margins calls get back to the designated MCR quickly. If the MSSR = 0, global settlement mode becomes more likely and holding smartcoins becomes much less attractive actually (which is the opposite of what bitcrab is aiming for, that is if the holders of the smartcoin realize this)
Thoughts? Maybe I'm wrong to understand that it makes global settlement more likely.
Anyhow, MSSR=0 seems like a decent experiment