Right right this is the project that caused @shredz7 to change the name of his project from SteemEngine to Stratos. He is much closer to these projects than I am you should ask him. He knows a lot more about the technical details.

I seem to recall a conversation we had some weeks ago about how these smart contracts might be vulnerable to attack by DDOS and the like.

The concept of it all is still sound. If you can create nodes that are in consensus developers can make assets on the Steem blockchain just by leveraging our posting key cryptography. Given the rules of the digital asset, they can be created and transferred by piggybacking info carried by the main chain (in this case Steem).

I think the most exciting thing about it is that it's being attempted on multiple fronts. Something is bound to stick.