In the design of the current bitUSD a believe exists that the shorter is the one taking a loan. This is a very arguable hypothesis. He is indeed providing the collateral but he is doing that and also providing the product - a stable coin with a price equal to 1 dollar. Isn't it the bitUSD user (the bitUSD long) who is actually taking the product with guaranteed stable price for which someone else risks something and provides collateral?
If we accept this to be the case indeed there is a excellent possibility for a new bitUSD [ dUSD - DemurrageUSD] existing in parallel to the current bitUSD that provides interest to the shorter!
Below is one way this could be done.
-The dUSD : BTS market the sell buys always happen at the peg 1:1. dUSD buyer compete by offering interest rate to the shorter.
-The dUSD seller receives the rate for its individual sell (say 2%)
- This sell is added (volume * percent) to the long term interest rate paid to the dUSD shorts.(1)
-Every maintenance interval the current average rate is taken from the long positions amount and added [given to the shorts by reducing their short position dUSD owned back to the system]
-Every dUSD position closed reduces the interest by removing (volume* highest percent in (1) ) from the global weighted interest percent calculation.
- Forced settlement still exists and is even with very short wait time - 30 min - 1h.
+++++++++++++++
Main benefit - much tighter peg!!!!
Why?
Shorts are highly incentivized to create dUSD and in fact actually get paid for the product they provide.
Shorts will not sell below the peg because the buyer can buy below the peg and immediately settle for a gain.
Note
dUSD will not be used for long term saving but with tighter peg in the majority of cases will be excellent for trading. 5% interest is not a big deal if you need the dUSD for trade happening in from a few minutes upto several months.
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Topic: A case for Demurrage bitUSD (dUSD) (Read 4541 times)
