Burn BTS to create BitAssets.

[bitmeat]

BM liked the idea for its simplicity, but ultimately people thought that if you can create BTS by burning assets, feeds could be manipulated and the network could be compromised.

But I think some checks and limits could be put into place to prevent that.

You are not really "burning" you are effectively trading against the feed itself. In other words the blockchain itself is a market participant ensuring liquidity, but not preventing others trading within the spread.

[Akado]

Nice! I don't understand the problem of not being able to burn bitUSD to create BTS. I believe it's good users are not able to create BTS. If you want BTS why not just sell them for bitUSD?

I like the idea of the spread being voted by the community 

What happened last year for this not to be implemented? Were there any valid counter arguments?

[bitmeat]

That's basically half of my proposal from a year ago.

My idea was to fix liquidity problems by making the blockchain be a market maker. Kind of how NBT works but decentralized.

So you burn BTS and create BitUSD or other assets at feed price. No third party is involves - just trader and blockchain.

But then also allow burning of BitUSD to create BTS - I.e. Go the other route as well.

People were too concerned with BTS potentially getting diluted if it can be created out of assets. But in reality I think it would've attracted more serious capital, where you wouldn't be locked in a roach motel, unable to get in or out.

Add to that making it a parameter voted by community for the spread so the blockchain is actually profitable itself. E.g. 1% around feed price - you can convert unlimited amounts.

[Akado]

What if instead of just burning BTS, we could burn them while creating 1 bitUSD for example, that would be immediately be placed as a market order and sold at price feed? Then each time that bitUSD was bought by someone - since now the DAC owns the bitUSD - the BTS used to buy it would be burnt? I've read something similar to this today somewhere but lost the thread.

We usually just burn BTS, what if it had more utility than that? Now each time that bitUSD was bought, a bitUSD worth of BTS would be burnt.. A concept of Burn to Buy.

Person A burns $5 worth of BTS to create $x amount of bitUSD, dunno if it could be 5.
Created bitUSD would be immediately placed as a market order at price feed (i guess the user who creates the asset would also choose the market for the order to be placed? Or would be placed on a default market? Dunno, but those are details)
Person B buys this $x amount of used with BTS
$x worth of BTS were "bought" by the DAC, which burns them
Person B now owns $x amount of bitUSD

I guess this would end here, we would only have 1 iteration of the DAC "buying"(burning) the BTS. Would be awesome to do this multiple times but I guess it would end here. If Person B sold his bitUSD to someone else, the BTS used to buy the bitUSD would go to Person B...

The positive thing is every time someone would do this, it would create a Double Burn. The person originally burning BTS because he wants to, like many other have done, and the people buying the bitAsset at feed price without knowing they are buying it from the DAC. This could possible double the amount of BTS burnt assuming someone would eventually by the created asset, which is safe to assume it would happen.

Still, it might be a more useful way of burning BTS? As it creates bitAssets at feed price?

Random idea, does this even make sense? Or is it something completely stupid? Could this provide more liquidity, help tighten the peg and provide more profit ? If it makes sense, is the concept of the DAC owning a bitUSD feasible?


Btw I saw the idea of burning to create an asset on some thread here on the ofrums, which i lost so I gave it some thought and decided to post it. I didn't come up with this, only tried to expand it a bit.