Lets stop theorizing about how pegged currencies should be conceived. Nubits is an example that works in practice. Theres no SQP, and theres no forced settlement. These features merely over-complicate the market and discourage the very people we need to make bitassets work.
IMO Nubits is an example that seems to work for a while but still is doomed from the start. I'm sure nobody here would argue that we should invent a BitShares-3.0 that is essentially a Nubits clone.
Bitshares is useless if bitassets don't work. Its really that simple.
I fully agree.
The problem is that there's a lot of theories how bitassets are supposed to work, but so far nobody (including BM) seems to really have nailed it. (That sentence sucks somehow, I hope you get what I mean.)
IMO what's happening here wrt SQP is that some people have entered short positions, fully aware of the risk, and fully aware of the rules, and due to the BTS bear market they're now in the danger of losing money. So they're now complaing and demanding that the rules be changed. That's not only lame, it's outright dangerous because by changing the rules they're putting the whole MPA system at risk.
I fully understand it's for those with 'insufficient' collateral, but did you understand my post about walking the book down in an illiquid market and why it's more likely to prevent a black swan than cause it?
That's essentially impossible IMO, because you'd have to walk the book down in *all* markets to generate a significant impact on the price feed, and if you're that powerful the market is in your hands anyway.
And you didn't answer why a 10% reduction would be that big a deal for margin overhang. Compare that to the upside where you're going to get much more liquidity in the market, create thinner spreads, and further lessen the chances of black swans.
You're playing with numbers. It's not a 10% reduction, it reduces the "punishment" to (near-)zero, which is a 100% reduction.
And the upside you're quoting is obviously purely speculative.
Lastly you seem to be in favor of forced settlement.
No I'm not. I think forced settlements can be used for market manipulation, and I have voiced that opinion when the idea was discussed 6 months ago. But the market manipulation I was afraid of back then has nothing to do with the situation discussed in the other current thread.