While obviously polarizing, I think the referral system is brilliant because you're giving people a business opportunity while simultaneously growing the network. At the very least it's worth a try.

I particularly like the analogy to PayPal, but has anyone else noticed that the actual way PayPal bootstrapped growth is being misremembered?

It wasn't primarily about the referral program, it was the fact that you got $10 free PayPal dollars when you opened an account. What would it take for Bitshares to do this? Obviously you'd have to protect against gaming the system somehow, possibly by *gasp* identity verification.

Obviously the other problem facing the referral system right now is that there isn't a clear use case for joining the network (yet).

Anyways kudos to the team for getting this thing shipped, but let's get it straight about PayPal: the free cash to join is what got things moving.

If the price of a bitAsset is below the feed there is no need for additional supply - so no need for shorts to go through.

This depends on your perspective (that of the system wanting perfect parity with the pegged asset). However from the perspective of market participants, any additional trade is a good / necessary one, else they wouldn't make it.

The demand for bitAssets is naturally higher at a lower price, probably sharply higher because everyone has some doubt as to the actual ability of the system to track the real-life assets. Hence people want a discount on the feed price.

In addition to being able to track the actual assets, one of the metrics bitshares will be judged by (and invested in or not) is trading volume / liquidity of the major issues (bitUSD, bitBTC, etc). So it is a trade off between guarding the "perfect peg" (which can never be truly perfect obviously) and creating action in the market.

I believe a slight shift off of the peg (5-10%) is inevitable and acceptable to market participants, so we should build that leeway into the system and gain the advantage of increased volume and liquidity.

Correct me if I'm wrong but the summary is this:

My order was never executed because of a market condition where the execution price would be below the feed price?

And as for APY this simply provides ordering for which orders would be executed first?

And the reason for this restriction (can't short below the feed price) is to protect the bitAsset price from being cascaded downward?

This is all very helpful information. It would be GREAT for the project to have this info in an easy to find place, like the FAQ on bitshares.org, seeing as the ability to short is maybe the coolest feature of the exchange right now.

Under what conditions is a short sale order actually executed (ie units borrowed from the system and placed on the market)?

Last night I tried to short BitUSD, providing a sell price equal or less than the highest bid price. I checked it today and the order was not executed. Because it is unclear what to specify for the APY, I thought maybe this was why it didn't execute.

So today I tried another short with a higher yield and still nothing.

This is very frustrating and I highly recommend more transparency on how this works as well as what to specify for yield.