100% Zero-Reserve System

Continuing the discussion from Immediate response required from shareholders - Low sell side liquidity:

How can we make NuBits a 100% zero-reserve system?

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I don’t think it’s possible. With a 100% reserveless system, we wouldn’t even have NuShares to fall back on. Even NuShares act as a decentralized reserve, which we can leverage to permanently reduce the supply of NuBits. I think the important thing is that we continue working on decentralizing our reserve. We no longer hold it directly on exchanges where it can be stolen through hacks, so that is a major improvement, but I’m sure more can be done.

I disagree that nsr is a reserve. It is a place to store value, but there are no keys or controls to generate risk. If we had a completely frictionless burn gateway, it would allow us to leverage nsr without using reserves.

Still, I don’t think even that would allow us to keep a completely reserve-less peg. I think we will always need at least T1, which is still a reserve even if we decentralize it to a huge degree.

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I think we are talking about two reserves here, use a bank metaphor – one is gold in central bank basement, one is in branch office safe.

I don t see T1 T2 and T3 as reserves because a reserve is traditionaly centralized. But what really matters is whether or not what backs the peg is decentralized. So if the reserves are decentralized meaning spread over plenty of nodes, i am fine with the reserves.