For the token to exist you would have to bet that bitshares would increase more than 100% a year, which is pretty risky. People would much rather short the dollar or the Hero so I don't think you'd have much of a market.
RE: HERTZ FBA Created!
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HERTZ FBA Created!
If the token trades at the price feed, then you're right. However, my bet is that the token wouldn't trade at the price feed - it would trade much higher. Probably 10x higher or something like that. In this way, the market would set the effective interest rate - just as it will with HERO.
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Because there is a shortage of tokens. Nobody would create the tokens if that were true, meaning an illiquid market. An illiquid market will be plagued with price swings and margin calls, plus a huge loss of money to the issuers.. especially if it were trading at 10x the price feed, which I don't think could be sustained due to the price fluctuations
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Trading at 10x the price feed is an unbelievably good deal for the issuers, because it would mean they are on the hook for only 10% of the market value of the token. I agree that that far from the price feed is not very attractive to buyers, but it's still a token that's guaranteed to be worth more than an index that doubles annually. That's actually worth a good deal.
I also agree that it's not a great use case for smartcoins, but I bet it wouldn't be totally illiquid.
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