After almost a year it's clear to me that the current system where speculators are expected to short BitUSD into existence will not create the large supply of BitUSD that is needed to make bitshares successful.
All bitassets have this same issue but we should on concentrate BitUSD first.
We can learn from Steem backed dollars (SBD) which are backed by even more collateral than BitUSD but are created in an autonomous way by the system and not by traders.
I believe Bitshares needs an autonomous solution for creating a supply of BitUSD so that it is always available to buy and without a huge markup against USD.
This would require a hard fork and community consensus.
The easier option is to get the committee to create a worker proposal where all the received funds are used to create BitUSD and sell it to anyone who wants it.
I propose the committee make a worker proposal called (BitUSD liquidity) for 1million BTS per week which is used solely to create 2000 bitUSD every week.
This will all be sold to the highest bidder each week.
It is important to note that even though the committee will receiving 1 million BTS each week for creating BitUSD there will not be an increase in the overall supply of BTS available to the public. Also the increase in supply of BITUSD will be 100% offset with the BTS used to buy it. This means dilution is not an issue at all unless the committee goes rogue and attempts to spend these funds on anything other than the creation of bitUSD.
This isn't the first time this idea has been suggested but I think now is the time to try it and if the community doesn't like it they don't have to support this worker proposal but I would like to see the committee propose it so it can be voted on.