The only problem is, that by halting the market bytemaster is making the shareprice go down... which is shitty for investors... I know that bytemaster is brilliant in many ways... I am simply disappointed that he thinks regulation helps to make the market move where he wants it to be...
I think your stuff is wrong.
The problem is there are consistently more shorts than longs.
So at 0.9 you weren't underpaying for a BitUSD you were paying the likely average price even 3 months from now.
Traders would not make it trade closer to the peg they would only tighten up that $0.85-0.95 trading range
Introducing the price feed that limits shorts (or a collateral system) does help the peg.
The problem is that there is very little demand @1-1 (I.e a dead market hence the need for interest.)
Sorry oasis... it does not work like this... I can make money if I buy at 0.85. Because doing the arbitrage costs money... especially in a still illiquid market. the more liquid it gets, the less it costs me, the less spread is needed, until it is exactly 1:1 in a superliquid market with small bid/ask spreads and low exchange commissions. But if you do not allow the market to start working you kill it like now.
The market worked just fine in the beginning... but by putting in these childish regulations now you do not have a market anymore, until you get rid of this government/regulation stuff... The good thing is that bytemaster, our governor, can simply get rid of this regulation stuff and make the market free again. If he does not do it, he will kill this project he worked so hard for.
Yes before you could make money buying @ 0.85 and selling at 0.95 even up to 1-1, so there were trading & arbitrage opportunities but because of the big orange wall on the right and the small green wall on the left, BitAssets will trade below the peg for a long time and if the peg isn't established then the system may not work.
In the new current system you can still make money by arbitrage, because it only limits shorting below the peg I think? But people can still buy and sell at different prices once BitUSD is created.
I agree that it creates a very small market now but I don't think old way was solution.
Solution is offering interest at 1-1 then many buyers, big market.