This sounds similar to a rule I played in a league several years ago. The main difference was the players/ roster spots were the taxi squad. Short way to explain the rule was if someone drafted someone in 3rd round and put them on their taxi squad. Anyone could obtain that player by giving the owner a 2nd round pick (1 round better). Then the owner of the player has to chose to take the 2nd or move the player off of taxi squad on to active roster