im trying to explain this to myself based on some plain english real world example. Please tell me if i got this wrong, which i probably do:

Let's just say for this example, a cvtoken is backed by a bit-dime (0.1 BTC), and a BTC is worth $100, so a cvtoken is basically worth $10 at this time.

You want 50 cvtokens, so you throw 5 BTC into the virtual escrow (not sure what you mean by "virtual"). Or you give somebody $500 to do this for you (?).

Are these cvtokens now sort of analogous to ripple xrp? (sort of a side question)

Anyway, say 3 other people do this exact same thing. There is a total of 200 cvtokens existing, and 20 btc in escrow worth $2000. The people commerce with their cvtokens acting like they're worth $10 apiece roughly.

Say 2 months later, somebody has 30 cvtokens they want to cash out.

    Scenario 1, BTC has gone up against dollars so 1 BTC is worth $150:
        He/she will get $300? This $300 will come from escrow knowing that cvtokens were bought at $10 apiece. The escrow gets the $300 by converting 2 BTC into dollars, leaving 18 BTC in escrow and 170 cvtokens in the economy. So now the total dollar monetization of cvToken is 170 cvtokens x $10 = $1700, but the BTC backing them is worth 18 BTC x $150 = $2700.

    Scenario 2, BTC loses value and a single is only worth $50:
        He/she will get 3 BTC back.

I realize this only part of the whole thing, i think you specified the need for some other markets that more equates the risks and rewards for all the various players, but tell me what i got right and wrong so far before i ply you with more example questions. Sorry this is so brute force.
thanks!