The intrinsic uncertainty of hodling SmartCoins

[xeroc]

UIAs are surely not affected.
The idea behind MPA is also that once you gain tracktion and liquidity/supply rises in several MPAs, you get a inertia or slackness. You need to know that once the DEX has some kind of critical mass, you will not be easily influenced by external markets as the price feed will then be dominated by the internal markets and you need to collapse not only external but also the internal market ..

[karnal]

What did I miss?

You may have missed that bitUSD are not simply 'wiped' of the users
account's. In fact they are exchanged into BTS (read: equity) AT the
black swan price (e.g. 100% collateral). That means for every 10 bucks
you have in your account, you will get 10 bucks worth of equity.

And unless this happens to many markets at the same time, this will be
bolstered by the liquidity of other assets, such as GOLD, SILVER, or
EUR.

Ok. But if the price dropped (what are the exact rules for the automatic liquidation, by the way?) so suddenly, what's to say it won't drop even further at the drop of a hat?

And as far as I can see the point still stands, imagine you were managing who owes what gold and silver with bitGOLD and bitSILVER .. suddenly the record is wiped clean, perhaps UIAs are the only viable choice for that model?

[xeroc]

What did I miss?

You may have missed that bitUSD are not simply 'wiped' of the users
account's. In fact they are exchanged into BTS (read: equity) AT the
black swan price (e.g. 100% collateral). That means for every 10 bucks
you have in your account, you will get 10 bucks worth of equity.

And unless this happens to many markets at the same time, this will be
bolstered by the liquidity of other assets, such as GOLD, SILVER, or
EUR.

[karnal]

The last time I checked this was on 0.9.3, but there was something about if the price drops ~60% in less than (some hours, was it?), then essentially the user ends up with a bunch of (probably near worthless by then) BTS.

[Riverhead]

Are you referring to forced settlement of under collateralized debt?

[karnal]

Lately, as I think about the future development of the platform, something has been bothering me. Not sure if this has been brought up before, but can anyone explain why should any user ever trust the BitShares platform again if a black swan event were to occur?

It would make the newsrounds everywhere and forever taint the reputation of the platform.

When you consider the business side, it's potentially even worse.. imagine you own a business buying/selling (physical) gold and silver, and accept/receive bitGOLD/bitSILVER for the service, thus registering on the blockchain which of your customers own what... there comes the black swan, and your business is wiped off the ground, you can't tell who owns what any longer, it was all liquidated due to no fault of your own (or your customers)

Or say you run a business operating on the model of a bank.. all your (very non technical) users hold bitUSD, bitEUR, bitWhatever at your crypto-bank, until one day comes the black swan and all of it is wiped away, no warning .. the customers will come for you demanding money, though all of it was lost, again through no fault of either business owner or customer.

If all of the above is correct, then no saver or business owner in their right mind would put their wealth in SmartCoins.
UIAs are hardly any better, if the idea was decentralization and "being your own bank", "not needing third parties".

As a transient thing where the user pays with bitUSD and the merchant takes the bitUSD, it works. But if underneath there is always the lingering and very real uncertainty that due to no fault of your own all of your assets can be insta-liquidated .. then anyone who understands that won't hold any considerable sum in the system.

What did I miss?