To clarify: This would be the case when BTS would decrease in price more than twice compared to the point in time when the short positions was taken (if a short position requires 2x Asset value in BTS)?
so i guess this describes the margin call case. How can the system run out of bitshares like mentioned in the OP?
If the starting collateral is 100 BTS backing 50 USD... and the price of 50 USD rises to more than 100 BTS so fast that the market couldn't cover the position in time then there would not be enough BTS in the short position to buy back 50 USD... so the network would be forced to create new BTS to close the short position.
As I put money in BitShareX, so I keep thinking it in my head.
Please think about this idea.
BitShareX system must very powerful, and make sure BTS has the real value.
BTS's value is real and stable, the marketing price only show how much people like it. But not effect BTS's real value.
My idea is:
suppose BTS born by 4000 BTC(at 1000 USD), and 1,500,000 PTS(at 40 USD)
INIT value:1 BTS_value == (4000 * 1000 + 1,500,000 * 40)/ 4000,000 == 16
when 4,000,000,000 USD want join BitShareX for shares,
BTS born 4,000,000,000 bitUSD,
1 BTS_value == 1016 + fees
BitShareX only decrease value when value decrease.
e.g. people get money back from BitShareX(and do mandatory liquidation base on BTS_value).
if you want 5% double shares, buy bitUSD;
if you want own the growing of the BitShareX system, buy BTS with price higher than the BTS_value and compete with more likers;
if you want sell 1000 bitUSD value BTS at 1 bitUSD, it is up to you. but this not effect the BTS_value.