The collateral needs to be high enough that bitAsset holders are confident it will be sufficient to withstand volatility. The higher the collateral, the lower the leverage for the shorter, and the higher the security for the bitAsset holder. Since the entire cryptocurrency space is notoriously volatile, high collateral requirements are likely necessary.
Yes I do understand this. It is very important that the asset does not crash.
I am just thinking from the perspective of the short side, that it seems quite a hassle to put up that much collateral. To me anything close to 100% seems excessive. Again I could see a minimum of 50% as sensible with a margin call around 20-30% .
I am overall very impressed with bitshares. I think many things are addressed and it seem that the team has really tried to solve all the issues that bitcoin has.
The key things being:
- having an easy online wallet. I was able to create one super fast, without needing to download anything.
- the confirmation time issue with bitcoin has been solved along
- decentralization problems looks to be solved.
- DEX: the counterparts DEX is a cluster ### this one seems to work. I was able to buy bts and then buy bitUSD within seconds. It was beatiful
- governance: it seems with 100 delegates and them being able to vote on things, one should be able to change things and have a governance and feedback body thru voting. I don't understand the shareholder and the business model behind bitshares at this time. But it looks more robust and flexible while at the same time democratic then bitcoin
Now the big thing is the pegged assets. I think that could help tremendously and one could solve many problems currencies have these days. I am not sure if they work very well so far. the liquidity is very small but its really amazing that this concept has shown to work technically at least.
So overall i am very impressed with what has been done. However a bit shy to put big money into it at this point until i understand the business model better.