A middle-ground option: Cash + At-Call Interest Bearing Deposits

For completeness there is a third option which could be worth exploring.

Traditional money markets have 3 options working in unison - cash, deposit accounts, and term investments.

The Yield Option on bitAssets explored above is like a substitute for a deposit account. It could effectively do away with the need for a cash option, which arguably may no longer be required in a digital economy. On the other hand, there may be a good use for a separate cash option (e.g. improved anonymity or other features?) that perhaps has not been fully explored or implemented yet, and perhaps we want to keep this option open.

Having a cash and at-call deposit option working together could still offer at-call yield potential through the deposit market, and so still achieve the same benefits of a yield-based bit-Currency. The main difficulty is dealing with the situation where natural market rates are negative. There would have to be an enforceable way to charge interest on cash to return to shorts (probably method 1 in the OP). An open question is how important negative interest rates really are.

I think it is important to discuss how we see these different components working together.

>BitAssets are create using deposit accounts

The blockchain can collect BTS, for those want to save and investing in bitAssets creation, example Alice want to create bitSILVER to create btiAssets is Alice need to use the current price 100BTS to 1silver Alice need to give 100BTS to the blockchain pool of BTS the blockchain pool automatic give 100BTS to secure this contract the bitAssets is been create, and the bitAssets can't exchange form the blockchain pool, the bitAssets can only exchange BTS form the market exchange. The blockchain pool of (BTS 100%) 50% of the pool use to secure contract and cover the lost 30% cover the lost 20% can be take out only the pool BTS back bitAssets never over 70% if the BTS price drop over 70%, 70% or 80% no more bitAssets can be create using deposit accounts and give warning and 4 thing can be done.


1)increase the BTS price.

2)increase the BTS supply in the pool.

3)increase the bitAssets transaction fee the  additional fee exchange to BTS and give to the blockchain pool. ( blockchain pool BTS use 90%< automatically activate)( blockchain pool BTS use 90%> normal rate)

4)decrease the total number of bitAssets using gateway.

How the people save BTS at the blockchain earn example total BTS in the blockchain pool is one million Bob save ten thousand, Bob earn 1% of the transaction fee, now the transaction fee give 30% for all those people save BTS at the blockchain.

bitAssets

1)first back by long and short

2)if no people want to short deposit accounts can back the bitAssets

3)bitAssets over the deposit accounts max limit the blockchain back the deposit accounts by increase the transaction fee

Is this now any different from the current system?

people can create bitAssets and don't lost the BTS, and the BTS price go up i can take back my the same BTS have more value.

As soon as bitSILVER/BTS price moves more than 50 BTS in either direction, one of Alice's contracts will get margin called and the bitSILVER gets destroyed

this two contracts is link one can go up one can go down the win can cover lose, or the blockchain can automatic close two link contracts.

Bitshares can only create bitGOLD or bitSILVER, bitGOLD and bitSILVER can only create country backing currency, BTS can exchange BitAssets.

How the bitGOLD or bitSILVER is being create. The market can only go up or down an example Alice want to created bitSILVER and the price is 100BTS to 1silver at the time, Alice make a derivative contract 50BTS buy up and 50BTS buy down at the same time in the blockchain this the market can go up or down the contract is worth it 100BTS all the time and Alice need to put 100BTS to secure this contract a bitSILVER is born. All contract is the same only volume of the contract not the same the price volume is at the contract create wallet. If the new price of the BTS is 50BTS to 1silver Alice can end his old contract using 1bitSILVER in her own wallet and make a new want at a lower price.

How bitUSD,bitCNY is being create. bitGOLD or bitSILVER is back by 200% of BTS so what the price of the gold or silver is the price of the currency. Then blockchain holding the bitGOLD or bitSILVER to back the bitUSD,bitCNY. And blockchain control the backing currency limit flow in and out of bitGOLD and bitSILVER.