What if the market-peg doesn't work?

[pgbit]

Could you build these features into the system anyway, so that its an automatic fail-safe that kicks-in at a certain stage if necessary, to account for any future eventuality?

[bytemaster]

There are many new people to BTSX that have their doubts about the market peg, and that is OK.  After all it is an economic experiment.   I have high confidence that it will work, but for those with less confidence I would like to present you with our backup plan:

*IF* the market peg doesn't hold well enough (insufficient liquidity, manipulation, etc) then we have a very simple fall back option:

1) The delegates publish a price feed (use the median)
2) All trades must be within X% of the price feed

If there is not enough liquidity it is also possible for the network to "print" BTSX necessary to make great deals relative to a trusted feed.  IE: if BitUSD bids are over 10% above the feed, print BTSX to short BitUSD and if it is under the feed by 10%, cover the short.   Simply knowing there is unlimited sell pressure at 10%+ and a large cover at -10% could also enhance the system.  The benefit of this "system trading" is that the profits from shorting high and covering low go to the shareholders. 

Bottom line, we are going with the most market-based solution first and have fall backs to feed based solutions if they prove necessary.  The fall back solutions remove all of the uncertainty about how trades will be executed in the future (for those who do not trust market pegs yet). 

The time to implement the backup system is less than 1 week if needed.