Q) Why is there a problem implementing pegged assets?
A) The primary answer is that there can be no redeemability to the real asset on chain, for obvious reasons (since fiat/gold/silver/oil are not digital in the first place).
Q) Why is bitshare's current solution inadequate?
A) Those who borrow bitUSD from the system are at much higher risk than those who buy it from the market because the borrower must actively maintain his collateral and can get margin called by the system if the feed price moves enough
Q) What effect does this have on the price?
A) The borrower is forced to price his risk into the sale price of the bitUSD he borrows from the system - this leads to a situation where the price of bitUSD will always trade at a premium compared to the feed price, this damages the viability of the product as a whole.
Q) Is there another design which doesn't have the same biased risk profile, or is this just a natural consequence of not having redeemability?
A) Discuss