In the past I would have agreed with this idea, but after what I've seen recently, I am going to oppose it. I used to think about creating BitUSD from the reserve pool, but there are negatives with it and there are many negatives smartcoins in general.
Dynamic peg is dangerous! NuBits failed and that should be a lesson to us as well. There are many dangers here, that people should look at :
What happens if the committee goes rogue or gets hacked? The more assets that exist, the harder it will be to stop the losses. It would take days for the community to vote for another committee. Most people here would agree that governments create more problems than they solve. Same should go here too. We've created something decentrilised, just to make it centralised again? Yes I know, we are the ones voting for the committee, but who guarantees that we are voting for the right people?
What is the best collateral ratio and who says what is best? What if BTS' price drops 80% in one day? MakerDAO is a clever idea that is taking this a step further with their special SDR solution, that gives one of their tokens stable value, but not pegged on to anything. BitShares holders don't gain much from those assets, but they are also not going to lose much in case something goes wrong. The price might go up because people are buying BTS, but that's irrelevant.
Why would someone buy BTS and convert them into BitUSD, when the only thing he does is to raise the value of BTS and then risk losing all his money in an extreme scenario where the price goes down? It doesn't make sense to risk so much, in order to get 50% or less in a form of a stable token and then probably end up losing up to 100% of your total value in during extreme situations. Nobody, with the right mind, would take that risk. Again this is addressed by MakerDAO, in a special way.
The whole SDB is a scam guys. You have to face it sooner than later. Same thing as Nubits. If there are no actual USD/CNY reserves, then these tokens rely wholly on speculation of BTS. That's what I'd call an amazing ponzi scheme. Yes a PONZI! Who do you think we are? The FED and we can print USD from our blockchain? This is mental guys. Not even the FED itself should have the ability to print dollars, let alone the BitShares community.
The value of those BitUSD solely relies only on people buying BTS and nothing else. As long as BTS has a 'price', they have some value. Even with limitless dilution there is a limit in the dilution which BTS can take before its price crashes and then ends up crashing the value of those BitUSD.
Markets are clever despite that they are irrational most of the time. There is a reason that BitShares are low in market cap and that smartcoins haven't gained traction. If you can't trust a bank or an exchange, what would make you trust a 10M start up? Dynamic peg is fiction and might be currently working under some certain conditions, but the fact that it could fail under specific ones, should be worrisome.
TL;DR
1) Dynamic peg = Fantasy
2) Printing our stable coins = Scam/Ponzi
3) Dynamic peg has no protection against : the exchanges we are fighting against (yes we take the price feed from exchanges), the committee which decides the price feeds and depends solely on people constantly buying BTS on those exchange so that the price doesn't go to 0 or just even drop substantially.
You raise some interesting points and I agree with some of what you say.
- The committee is not to be fully trusted as it is run by humans who are fallible and inconsistent.
- If this issuance of BitUSD was done autonomously by the blockchain then it would be a much better solution. (as steem dollars are issued)
- SDRs that you mentioned are just a basket of 5 major currencies and a BitSDR would just be another bitasset.
- dillution is limited to about 10 million bts a month
Our bitassets are not perfect pegged coins they have the flaws that you mention such as:
relying solely on the 10 million dollar market cap of BTS, relying on price feeds from poloniex, relying on witnesses for accurate prices.
However, these issues will be reduced if BTS is more widely adopted and the market cap improves. Even then the bitassets will not be perfect but they will be a better choice for many people. To me it was obvious that nubits would fail because of the human element, BTS is much smarter and much more decentralised and autonomous. Perfect no, but the best chance I have seen to create a synthetic dollar that is not an IOU and cannot be controlled.
Remember BTS is an experiment.
The conversation in this thread has changed to worker proposals being paid in bitassets rather than just creating bitusd and selling it. Maybe I should start a new thread with this heading.
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