https://moonstonedac.com/threads/moonstone-smart-assets-msa.21/This is a draft subject to scrutiny, discussion, modification.
Examples below will talk about SmartUSD (SUSD) but will be applicable to other MSA's. It assumes that 100 XMS is valued at 1 SmartUSD more or less.
Moonstone Smart AssetsMSA's are assets in the Moonstone ecosystem with a value near or equal to the real world asset value it represents. These assets are tradeable in the Moonstone Decentralized Exchange and transferrable to other accounts. With the mechanisms put into MSA's, Moonstone will have market-pegged assets without black swan events and there will be no need for external price feeds.
In the Book/In the WildAn MSA is "In the Book" (ITB) if it is being sold in the order book or "In the Wild" (ITW) if it is in an individual's wallet ready to be transferred.
Order PairsAll MSA's starts ITB when an individual creates an order pair. An order pair is a set of a buy order (buy 5 SUSD for 500 XMS) and a sell order (sell 1 SUSD for 110 XMS). At this point, 1 SUSD is available ITB and ready to be ITW once someone buys it. There will always be a 10% difference between the buy and the sell orders.
Order Pair CancellingCancelling order pairs will have some restrictions. You can cancel a buy order if you have an SUSD ITB or SUSD ITW ready to be destroyed. The ratio will always be 5:1. Cancel 5 SUSD buy order per 1 SUSD ITB or 1 SUSD ITW.
Best Offer AlgorithmAt any point in time, there will be XMS, SUSD, SBTC, SETH in the Moonstone ecosystem. You can always say I want to buy X tokens for Y tokens. The system will search all the order books to find the best price that you can get.
Witness Anomaly Monitoring and Analysis The Best Offer Algorithm can easily be undermined with witnesses acting maliciously. These witnesses must be monitored automatically for front running orders and be voted out of the active witnesses list quickly. Witnesses must all be willing to share the order of how they received transactions from other witnesses and other nodes for statistical analysis if other witnesses are operating maliciously to front run the orders.
Smart Asset Health MeasureSMA's health will be constantly be monitored by the daily trading volume and the price with respect to the real asset it represents. The higher the volume and the nearer it is to the real asset, the healthier it is.
Next StepsImplementing SMA is the top priority of Moonstone. It will open the possibility of creating margin trading and loans for interest of Smart Assets. You will want to create a SmartUSD or a SmartBTC to offer it on loan to those who want to sell short and earn interest for it. This will be another topic and here, there will be margin calls.
