I guess it is intended for low value casual payments like buying coffee. No exchanges accept it afaik.
Rather like accepting a transaction at 0 confirmations... except it gives merchants a false sense of greater security which is actually really bad in general.
Exactly. And that has nothing to do with masternodes lying. It can be done with a Finney attack as I have explained in detail in my past few prior posts.
Now I will address your and smooth's orthogonal point about masternodes lying.
Since you can only spend on one quorum (or for instant x, then one designed masternode set), then it is normally impossible to double-spend.
The double-spend risks comes from the holes in their design that I enumerated in my prior post(s).
I don't see how it's impossible at all. If I own a majority of masternodes, I can do whatever I like with my quorums and it doesn't just result in a 'no quorum achieved' it can result in double spends at 0 confirmations. Like I said before, if the system is designed to wait until 1 block has passed (in order to observe the quorum results), then you might as well throw it all away and just use POW?
In the event that masternodes do create a conflicting locks, then PoW blocks will resolve the conflict. I don't really understand how a merchant is supposed to rely on this, since a conflicting lock can be discovered after the merchant has accepted the supposedly "confirmed by IX" payment.
Realize that normally masternodes can't lie because it is deterministically determined which masternodes can lock which transactions. All the masternodes can do is sign the lock or not sign the lock.
Some masternodes could attempt to sign locks which they are not designated to sign, but the PoW block chain would never honor these locks and would not put them in the block chain. And payees can do this same verification before accepting the InstantX transaction.
If these masternodes attempt to lie about whether these locked transactions are well formed or are double-spends, this will be verified by every mining node, so the masternodes can't cheat. But the cost of this, is that verification of every transaction is still done by every mining node. So Dash Evolution is not a block chain scaling design.