The market will run as your thought？ en，that's very interesting.
How about we just increase MSSR to to least 5%? Margin calls will be bought before GS happens. If you continue to 100% protect the debt holders GS events will happen all the time.
If you settle the under collateralized positions to smart coin owners that's just stealing from them and goes against DEX rules.
GS happens because of 1 thing:
1. debt positions don't adjust debt
It's that undercollateralization happens ..., not GS happens .... Whether to GS is what we're discussing, aka whether to change the rule.
To correct that DEX should:
1. Margin call their position with enough incentive for the position to be liquidated (MSSR), the margin call should be such that debt holder would want to adjust their debt or close it.
We didn't find the way so far, as you can see, changing MSSR didn't work.
You think they "should" do it, but they didn't do it. It means you are wrong, but not them.
Simply, collateralized debt means if you can't pay the debt, you lose the collateral, but nothing more.
When undercollateralization happens, the debt position holder is already prepared to lose the whole collateral.
It's not justice to ask debt position holders to put more funds into the collateral, although they could, they don't have to.
We're on blockchain. Thus "anonymity and unnacountability. If you take margin anywhere outside crypto your liability is unlimited. It is not limited to your deposit. The brokers have your details and can and will pursue you through the courts. In cryoto your liability is limited to your deposit." (credit to Anthony Garner in Telegram BitShares Community Group)
Shifting risk to the DEX, smart coin holders or anyone else is just not a good business practice.
Think it in another way:
It's the debt asset holders' responsibility to settle before undercollateralization.
The debt asset holders are responsible to keep value of collateral as high as possible, otherwise when they settle they can't get the full face value. It's simple, because settling for collateral is the only way to "redeem the value".
When you go into a position (borrow bitUSD or hold bitUSD) you bear some risks, although different risks for different parties. There is no such thing 100% safe. Current rule, aka GS, doesn't solve the issue.
But you are most likely a debt holder so you probably want others to pay for the risk you took and lost. When BTS goes up I don't see any debt holders creating GS funds, they just want to use other people's money to cover their risk. And that's the gist of it. The sad part is that by seeing only your way, you fail to notice that BTS continues to slide because of people's mistrust and bad practices.
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