100% Zero-Reserve System

[Lako]

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

Immediate response required from shareholders - Low sell side liquidity

Immediate response required from shareholders - Low sell side liquidity

Nu is reserveless

Because I love being pedantic, I think Nu is primarily a complicated system of reserves. We are trying to make our reserves as decentralized as possible, but this grant and in fact all of T4 and T6 as currently implemented and for the foreseeable future are very much reserves.

A non-reserve system has not really been approached in the crypto community. I think I am correct in saying an implementation of seeded nu auctions at the blockchain level would be the first attempt at a non-reserve method of peg maintenance. Bitusd and tether are most definitely reserve based systems. Nu comes close by trying to control supply, but ultimately we rely on reserves to keep the peg so that shareholders have time to control the supply directly via the block chain.

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

[Sentinelrv]

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.

[Nagalim]

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.

[mhps]

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.

[cryptog]

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.