after 2 years of experimenting I think the best was the first and original rule..depending on demand for bitassets the bitusd could be at a discount or a premium..period..no expiration no SQP and shinny formulas..nothing..traders would short when bitasset was at premium and people would buy bitasset when in discount forcing the peg
Merchants accepting bitusd as a form of payment would know that at some point their bitasset would worth more or less but at least there would be liquidity from traders and the risk for not beeing able to convert all their bitasset in fiat would be minimal..Now after 2 years we have no liquidity, no traders in the DEX nothing..anyway..
I agree about SQP. Margin calls should only happen when they absolutely must (since it is destroying BTS when in undersupply), and therefore should be tied to whatever is the most liquid/accurate market values. SQP of 1 (fixed to price feed) makes most sense until internal markets are liquid enough.
"traders would short when bitasset was at premium and people would buy bitasset when in discount forcing the peg"
That did not work. The very first bitshares (version 0.1 or something like that) tried this with no price feed or incentives to maintain peg, and price ran away very quickly. Why should I pay for something with no intrinsic value just because it has the label "USD" on it? I'll sell you 1000 maqifrsnwaUSD for 1000.
forced settlement is both the "gold standard" and the "federal reserve." It is the "gold standard" since you can always redeem your smartcoin for the equivalent value in something else. It is the "federal reserve" since it incentivizes the destruction of smartcoins when supply exceeds demand such that value is maintained. What (fiat) currency in the world exists without either a "gold standard" or a "federal reserve?"
Confession of a force-settler (before the GUI made it easy):I will confess that I was a forced-settler before the GUI came out. I was a force-settler because I spent the time to learn the system inside and out in order to test some bots for both smartcoins and UIA (I believe UIA with properly regulated KYC is the growth market for BTS). My bots know nothing about the underlying assets, they only know the market rules: Sell high, buy low, never sell an asset for less than it can be settled for, if you can buy an asset for less than it can be settled then buy the assets and settle. This behavior is rational, generates profit, and keeps BitShares working efficiently - so it is a win-win for everyone. I feel it is a "service" to the community. I probably settled 1-2k CNY since it started. No other market presented settlement opportunities. I did not know why CNY presented this opportunity; I guessed there was a larger supply of "whales" trying to gain leverage any way they can in risky ways.
When I first heard of Transwiser, I was shocked at the business model (since it seemed like it would always lose money since 1 bitCNY> 1CNY) but also extremely impressed that they figured out to "beat the system" where I could not. The service was great for BTS and I was looking forward to them expanding to other currencies.
When I heard about the price feed data inaccuracy, at first I felt bad but then realized that the error was in some thinking smartcoins were something they were not. See:
https://bitsharestalk.org/index.php/topic,20375.0/topicseen.html Even if the feed was incorrect, all businesses must know that the feed is all that matters and build their business model off of that (or work to correct the feed).
Now that we're almost through this "crisis," I think we're all stronger. Feeds are more accurate, people know what smartcoins are, and businesses know to research the system completely before building on top of it.