Agent86, In your system, lets say I have BitUSD to sell but there are currently no buyers at 0.9 vs. the dollar. Who do I sell to?
You'll generally have no problem finding buyers if you are selling BitUSD under the value of a dollar. The shorts have to close out their position to get their shares back sometime and they'll see bitUSD selling for less than the price of USD as a great opportunity to close out their position profitably. Also, no more bitUSD will come into existence until the market has corrected and people have scooped up the bitUSD.
We currently do have a problem finding buyers for BitUSD under the value of a dollar?
Yes, we currently have a problem of not enough buyers because we are allowing shorts to sell newly minted USD onto the market under the value of a dollar.
Ok so you would move the current market into a separate vehicle on BTSX as an 'interest bearing bond'
Interest bearing bonds require a separate market and implementation from the core BitUSD market.
However if I'm a BitUSD buyer.
Will I prefer to buy at 0.9 on your price fixed market, where I may not be able to find a seller at times because the price is fixed and people may at times not want to buy within that range.
Or would I prefer to buy my BitUSD on the other market at a better rate or interest rate, where I also know I can always find a buyer.
It seems BitUSD buyers would gravitate to the free market which is also paying them a better price to buy.
(I don't know if this makes sense, but for me, another way of looking at the current price is that if you price fixed at exactly 1-1 via price feed. BitUSD Shorts today would be willing to short at 1-1 and give the person going long a few BTSX per dollar as bonus to take the other side because they want to leverage their BTSX position that much. Longs would always choose the biggest bonus. Hence any other market on the same system wouldn't attract the longs.)
Edit: Never mind I'm confusing myself here...