Force Settlement Insurance

[Thom]

I disagree with this idea.

The way I see it this amounts to subsidizing poor judgment. Sure, it "collectivizes" the risk but how does that help BitShares?

Now if you add some type of premium payment to this idea it may have some value, but IMO the value it brings doesn't justify the effort required to implement it.

[tbone]

Couldn't we offer shorters an insurance option? For x% of collateral a day if they get forced settled it would be at the minimum 1.75 margin. This insurance could be used to interest to bitasset holders.

I think this is a GREAT idea.  More sophisticated shorters (i.e. true market makers) are able to hedge themselves on external markets.  Less sophisticated shorters (mostly ordinary traders) are not able to hedge themselves.   Your idea can gives such market participants the protection they need to more confidently short bitAssets into existence.

This idea should be seriously considered for the supply side of the equation.  However, the far bigger problem is the demand side.  And at least initially, I seriously doubt this idea will generate nearly enough fees to incentivize the kind of demand we currently need for bitAssets if we want Bitshares to do anything more than continue limping along.  So an idea like this should be done in conjunction with (or after) implementing a solution for the demand side.

For the demand side solution, see this thread:
https://bitsharestalk.org/index.php/topic,23981.msg304518.html#msg304518

[Pheonike]

Couldn't we offer shorters an insurance option? For x% of collateral a day if they get forced settled it would be at the minimum 1.75 margin. This insurance could be used to interest to bitasset holders.