Shorts pay an interest that amounts for a total of X bitUSD (X BTS @ a price per USD) ... Y bitUSD exist .. hence you distribute X bitUSD among the Y bitUSD in existence (early percentage)
in the above are you saying that i have to pay an interest rate based of the
amount of BitUSD i shorted/created in proportion to the current amount of BitUSD
in existence? like a weighted average of the network interest rate?
When you want to short bitUSD into existence you may need to define an interest
rate > 0 (because competing shorts may do so as well). Anyway, once your short
is filled (by a buyer), you will need to pay your interest as an "extra" to
cover your short position eventually. That fixed amount goes into a pool
(on-chain). Now, if anyone holding bitUSD moves his funds, he is allows to take
a percentage out of this pool. The percentage is something like (don't nail me
on that)
USD you hold / total bitUSD in existence x time in seconds you have not moved them / seconds per year
the more you hold, the more you can take out .. normalized to a year.
is the above pictured interest rate the actual annualized interest rate i pay on the shorted BitUSD? - seems fair the tool tip says "the interest rate you are willing to pay"
Not sure if that is "per year" .. it may be per short period of max 30 days ..
honestly .. I don't know .. (not a trader)
Again sorry for all the question, just want to make sure i understand the mechanics of this before i put it to rest.
Sure .. do your research!
i hope other people will also get benefit from reading this.
in any case it seems like you are happy that situation b is a good move to collect interest while still retaining all your Bitshares.
Let me tell you that BitShares 2.0 will not offer interest for holders .. hence
shorting bitUSD also does not require an interest to be paid:
https://bitshares.org/blog/2015/06/08/lessons-learned-from-bitshares-0.x/#socialized-yield-is-brokenI know that with these changes, the bitUSD loses alot of attraction .. but rest
assured, that the devs are working on a bond market to resurect interest paying
contracts.
Cheers
-- Fabian