I called it “proxying” BTC to USD as far as I remember.
I was very afraid of the volatility risks associated with assets like BTC and tried to mitigate those risks.
I shy away from the exchange default risk when leaving funds on exchange beyond those, you need for liquidity provision.
Keeping some funds at the exchange is no bad idea.
It would be great, if T2 could be “proxied” from NBT to USD and back (through NBT/BTC and BTC/USD) to protect proceeds from NBT sale against BTC volatility.
It would require liquid markets and cost a fee.
Automization for that is necessary.
A considerable part of the reserve needs to be kept in a safe place.
Stupid customers will check the offset/spread ONLY, smart customers will ALSO check the financial status of this company. Rememer one week ago, we had strict pegging and good liquidity? Everthing was fine. But I knew at that time that Nu was in very bad financial situation because of the big liability:net asset ratio, Nu may lose everything overnight.
In my personal assesment, if a DAO cannot pay off its debts within 6-12 months with its revenue , I’ll keep away from it. What’s Nu’s payoff period?
The fact that another crypto currency is held as reserve cannot be a viable solution to stability.
Rather, the concept could theoretically be a pool of negotiated assets/commodities which the shareholders agree to purchase. This could be things like the flooring of inventory to the purchase of silver an gold. Liquidation of NuBits would be determined by the NuBit holder exiting at a lower price and new NuBit holder takes share of Investment Pool Fund. The goal would be to grow the general size/net worth of the Investment Pool Fund. Interest could be earned by risk (ROI capital) and transaction fees.
Then let’s fight for that!
It made sense when I wrote about it the first time in a comprehensive way, almost exactly one year ago:
But it lead to no action.
Maybe I textwalled people away.
How do you explain complex matters without going into greater detail and providing explanations?
Should I rather say: we do it this way, because I know it’s right?
I prefer to explain, provide a rationale and let others validate, falsify or improve them.