At first glance "smart" assets look like a more secure alternative to regular (user-issued) assets. They are backed by collaterial. An asset owner can't just issue millions of coins. Your only risk is the market fluctuations and Nassim Taleb with his black swans. Right? WRONG! Actually, smart-assets even more risky. Here are some ways asset owners can f*ck everyone who have invested in their smart-coins.

1. Artificial margin-calls.
At any moment an asset owner can push fake settlement price causing a margin-call. When a margin-call happens he/she sells you the asset with a really high price. GOODBYE COLLATERIAL!

2. Artificial devaluation.
You are smart and just want to buy an asset cheaply to sell later. Is it ok? Haha! NO! The asset owner just pushes extra low pricefeed, borrows millions of smartcoins and sells them to you. Don't worry, maybe you will be able to sell those coins in 2058.

3. The "Issuer may transfer asset back to himself" flag.
Really!

4 (new). 99.99% market fee
The main profit an asset owner gets (other than stealing your money with options 1,2 and 3) is a market fee. Each time someone buys the asset, small amount of it goes to the fee pool the owner can use. For example bitCNY fee is 0.1% at the moment. That's ok until the asset owner sets the fee equal to 99.9%. It's just like sending coins you're buying directly to him. Awesome, isn't it?

But what if there are multiple price-feed producers? The settlement price is medianed, so everything should be fine? NO. At any moment, the owner can remove all pricefeed producers from the authorized list and push a fake price. Then 1 & 2

Can you trust a multi-signature account? OMG NO.
Registering new users costs nothing. It's easy to create a new multisig account (http://docs.bitshares.org/bitshares/user/account-permissions.html#flat-multi-signature), fill it with fake users, maybe add some "reliable" accounts and then 1 & 2 & 3

But smartcoins are awesome!
Yes they are, however the only safe smart-coins at the moment are bitASSETS created by trustworthy committee account named simply "commitee-account" (bitUSD, bitCNY etc) and assets created by people you know/trust. If you invest in other smart assets, be ready to loose your collaterial or get an asset that costs nothing at the end of the day. Like 0.000001 nothing.

I'm not going to say that assets I created (INDEXDJI, INDEXSPX, INDEXNASDAQ, CUBED.CNY, CUBED.USD) are any better. If I decide to cheat at some moment, i'll be able to do 1, 2 and then 3 (wtf guys, why do you buy assets with such permission enabled?).

I'm writing this to warn people, who don't really understand how smartcoins work. Also it would be awesome to hear any thoughts about how to make a really secure smart-asset on Bitshares.

I'm experimenting with a bot that could make confidential transfers much easier. Currently the only way to send assets anonymously is using command-line wallet and 1-2 extra blind accounts (http://docs.bitshares.org/bitshares/tutorials/confidential-transactions.html). The bot could automate such transfers and make them accessible without command-line wallet.

Instead of sending let's say 1000 BTS directly or via CLI, a sender transfers 1000 BTS to the bot account  providing a receiver address in the MEMO field (the same way as gateways work). The bot receives the assets, and sends them (minus the blockchain commission) to the receiver address using its own stealth account as a proxy.


<sup>Fig.1 Sending assets from Account1 to Account2 using the bot


Fig.2 Stealth transfer in receiver's Activity tab</sup>

What do you think about such bot? Is it like something people need? Are there plans to add confidential transfers to the bitshares UI? (it'd be awesome to have such feature built-in)

Some assets have logos displayed on wallet.bitshares.org or bitshares.openledger.info
How can I add logotypes for such bitshares assets (smartcoins):

Indexes:
INDEXDJI
INDEXSPX
INDEXNASDAQ
https://bitsharestalk.org/index.php?topic=26265.0

High-volatility smartcoins:
SQUARED.CNY
CUBED.CNY
and later
SQUARED.USD
CUBED.USD
https://bitsharestalk.org/index.php?topic=26322.0

Also, how to make first part of the SQUARED.CNY small, like: SQUARED.CNY?

What if a feed-producer, after some period of time, pushes a really low price feed (because of bad intent or software error), then she, or someone else, borrows huge amount of the asset from the blockchain with almost zero collaterial and sells it to the market devaluating the asset and getting all the buy orders? Are smart assets more safe from that perspective than regular UIA? How can a trader (or a smart asset owner) be sure that the price feed will be correct in the future? And is it actually safe to add a feed producer you don't know?