liondani, a quick look at my post history would show I'm on the side of a free market incentives. The OP for this thread proposed a complicated rule system that I was opposed to, and along the way I thought of a what I think is a better alternative given a rule-based approach.
If there are no rules or other mechanisms in place, and price is free to float anywhere, I cannot see any reason why the consensus should necessarily settle on a price around the peg. It could settle anywhere and constantly shift. It would then behave like any independent crypto. At the moment, being within 10% seems like an excellent result IMO.
In the end, I think there needs to be some sort of mechanism to ensure this consensus settles and becomes stable around the peg. I do not think any of the rules introduced to date achieve this, because they assume ex-ante that there is some sort of magic attraction around the peg price (a lot of which seems to rely on the principle of keep saying it till everyone believes it), and a little bump here or there will remove the current gap. Instead I think there needs to be a mechanism in place that financially affects the results to all parties of trading around that peg price specifically, not just any price the market consensus might instead settle upon. That I suspect is where the self-perpetuation idea mentioned in the white-paper might break down - it is a "holding yourself up by the bootstraps" concept that only works if the market has already permanently settled on the peg price as being the one and only right price.
To give the peg price such financial tangibility, some possibilities are: (i) a floating (interest) incentive paid from shorts to longs (or visa versa), (ii) a floating (interest) incentive paid from BitUSD borrowers to BitUSD lenders in a separate lending market where BitUSD could be deposited for lending, (iii) market exchangers who are willing to make BitUSD 1:1 fungible with USD, subject to an incentive. There may be others you might think of. But even in these cases, we need to be careful assuming things about what the market consensus (if there is even such a thing) might be.
I think such a mechanism would see confidence in the peg rise considerably, especially in outside circles, and then we see potentially massive interest and growth.