how is it possible for watchlist to be the buyer and seller of the same trade. this is not how a market should function. i don't have a screenshot of the time of the extreme overpayment event but if I'm not mistaken the fiasco occurred when watchlist sold to himself at a price of .01 hive when all the other trades before and after were priced between 1,06 and 1.13 hive. check the record of trades on hive-engine for the time period. that one 'trade' by watchlist for .01 was perfectly timed to be the price on which the payments were based.
it is not sufficient to merely average out the price over time. this buying and selling to oneself must be stopped, and not just for DVS but all trades on hive-engine.
also there could be a limit to how much, in percentage, any individual can delegate to dhedge. before the introduction of DVS the highest delegation was 8 - 10000. the fourth highest was 1600. now there is one delegation of 155,000 and two over 80,000. this is too much concentration.
and some serious consideration of establishing a blacklist of some sort where those who abuse the system are prohibited from participating. i don't know how that could work but it seems like it is necessary.