Suppose there are 1 customers. A has $1 in his accounf and B has 1 BTC. At the time trading stops the price is $1/BTC. The $ goes missing but we have the 1 BTC still. Then the price goes up to $10/BTC before we pay out. I see two cases, X and Y:
(X): If we pay out using the old $1/BTC price, total debt = $1 + $1 = $2, we pay out 50%.
A gets 0.5 BTC = $5 and B get 0.5 BTC.
(Y): If we pay out using the new$10/BTC price, total debt = $1 + $10 = $11, we pay out 90.9%.
A gets 0.091 BTC = $0.90, B gets 0.909 BTC.
In X, where we use the old price, the dollar holders end up with more than they were owed, while the BTC holders end up with less.
In Y, using the new higher price, everyone gets the same fraction of what they were owed.
Y looks like the fairer case to me. What does anyone else think? Can someone make a case for dollar holders to be making a profit on the dollars they were holding when the price of BTC goes up? Maybe I'm missing something.
Dooglus, to repeat a point that PatrickHarnett made in an earlier post, option Y wouldn't look as fair if the price of BTC dropped. The increase in price makes option Y look fair today however if the price dropped, option X would look equally as fair.
My recommendation combines both of option X and option Y. After the creditor picks a final payout date. We take the price of BTC on that given (agreed) day and:
(Z): We pay out on an averaged price basis. ie. Take the price of BTC when trading stopped. Take the current price and average the two. Use this averaged price to calculate payments using the same method as above.
This will not bias cash OR btc holders and losses will be equal for all parties. (regardless of if the price moves above/below/ends up the same as before). Happy to hear feedback on this one.