Add wallet fee/demurrage for extra revenue

This is what banks do all the time, they charge you for having a bank account.

Nubits is a stable store of value and many people might use it exactly for that. In that sense, the stability is the service Nubits offers to users. We should charge for the service directly by implementing demurrage.

We can use that demurrage to provide liquidity.

Demurrage is important because centralized exchanges don’t make NBT transactions when two traders swap coins. We cannot gather tx fees from traders but we can implement demurrage and charge from exchanges for holding NBT.

Any takers?


So parking for %0 would actually be a viable strategy because it would get the nbt out of your wallet? Super interesting. People would instead pay fees to park every day or every week or every hour or whatever to avoid the demurrage.

Hmm I didn’t think about parking initially but it makes things even more interesting. Anyway, I think demurrage should be very small in a sense that people shouldn’t even think of complaining about it. It also encourages nubits to be used to pay for goods and services as if they were a hot potato :smiley:

Yah, but it kinda makes nbt for sure worth less than $1, even if you buy it for $1. This will have a negative impact on how using nbt as a currency is viewed, in my opinion.
If I promise someone 100 nbt in a year, does that mean I need to have 101 nbt now to back that contract up?

The volume-dependent fees thing includes a clause about chunking the outputs in your wallet down so that you never get change from a transaction. We can charge whatever we want for this service, though it really just makes sense to keep that at the minimum fee. That means that we get paid when people need to reorganize their wallet outputs. Not exactly demurrage, but not bad.

Freicoin’s journey from a $15M market cap to $67,000 should be enough of a warning that there is zero demand for a demurrage cryptocurrency. Implementing higher transaction fees that monetize value transfer, while not punishing people who use NBT as a store of value, is the better approach for NuBits.

of course there is zero demand because only nushareholders would demand it.
there is also zero demand for the “maintenance fees” of your debit card but you still have to pay it.

Nu guarantees price stability so we can call ourselves an insurance company. We insure people the stable value of nubits. All insurance companies require their customers to regularly pay for the insurance. Our customers are people who hold nubits. We must find a direct way to charge them for that.

We might have a possibility to hit 2 birds with the same stone. We could implement a circular block chain which would forget UTXOs from the beginning of the block chain. In order to keep your coins you must regularly transfer them to a new address. The wallet could do it automatically for the user and this will work as demurrage. It also provides the users more anonymity because their txs will eventually be forgotten and reduces the size of the block chain.

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This is effectively accomplished by the ‘chunking’ I’m talking about: it is an address sending to itself. It occurs when a user needs to reorganize their wallet, which happens basically every time they receive the nbt and sometimes before they send.

Insurance can charge because they are a third party to the economy they are stabilizing. NBT is our economy, we want people to hold our currency. Every NBT someone holds is a personal loan to the Nu Network.

we need to make the ends meet somehow. until there are no better options, charging for stability seems logical to me. at least with demurrage we can make it a zero sum game but right now liquidity providers slowly drain Nu from funds.

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By the way, if you promise someone 100 nbt in a year, you could park those 100 nbt for a year so that they wouldn’t be affected by demurrage.

So exchanges will just park their cold wallet for days at a time so they can still access it when they need to (it only costs 0.01 nbt to park). We would really only make money off those that are ignorant of the parking mechanism.

We do need to make money eventually, but I still think we’re in the development stage where we consume more funds than we produce. This is true of any starter business. Creating demurrage would be a technical challenge that would cost developer time, and therefore funds. If the amount it generates is not worth the initial costs, it is not worth it. I agree with @tomjoad that we should focus on transaction fees, as they are one of the potential long term solutions to the problem of generating funds.

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Is it even possible to park for just one day? What’s the point? It should be impossible to park for so small period of time if there is not going to be any interest paid anyway.

It’s true that such enhancements require development so if we cannot afford the development there is no point to discuss it. However, because we cannot see printed nubits as revenue we must charge for the privilege of holding a stable currency.

Seeing Nu as a business (3rd party to the economy) rather than an economy is the right way to operate things at the current stage of Nu’s development. You can’t run things imagining that Nu has already become an economy while in fact it hasn’t.

By the way, if we developed a circular block chain we might actually get more users because we could then advertise nu as more anonymous than bitcoin. There is a need for a cryptocurrency that does not maintain the ledger of all TXs ever made.

You might not like it but demurrage might be the only real revenue we could ever have. All others are just imaginary revenues that depend on other people and their services. I would rather pay for demurrage and have nu around than lose it altogether because some nushareholders were unwilling to act like greedy jews for the sake of Nu’s survival.

If people start selling all their nbt, custodians will end up bagholding it. They will then shift it to NSR via burn auctions. They will sell the NSR to gain back buy support for the peg. Nu will continually print new NSR to buy back all the NBT that is being sold. Eventually we will end up with NSR at very low market cap and NBT at lower. However, we will have reached complete bottom and all profit from there on out is our own to distribute as we wish.

Or, we could continue to prop up the image of NBT as a stable currency, continually spending money in the process, until we develop functioning methods of profit off our transactional currency. In this case, NSR price is anyone’s guess and financial management is in constant dire need of analysis. They are both difficult options, but I like this one better than the first because I think we will develop those methods in a reasonable amount of time.

Depending on how it is phrased, I would not necessarily vote against demurrage. However, I think it is a very tricky point and most of the basic demurrage motions I could imagine I would vote against. I’m interested in your circular block chain idea, if it works and it increases anonymity that alone might be enough to compensate the image hit taken by demurrage. How difficult do you think it would be to develop this concept?

Demurrage should be small enough to remain unnoticed and its rate should be dynamic similarly to park rates.

Right now as a shareholder I feel myself being taken advantage of by shady traders who would like to avoid holding StampUSD due to ID verification requirements. I’m sure it’s possible to build a bot that would slowly leech the custodians by abusing the fact that a custodian’s bot has a small delay when refreshing the prices. Also, in the latter scenario the exchange takes all the profit from trading fees. At least with demurrage we can get our cut always. It makes a shareholder feel more powerful and I’m absolutely sure that there exists a healthy demurrage rate. We would just have to discover it. When people get more dependant on Nu we can slowly raise the demurrage to satisfy our greed.

As for the NBT/NSR printing/burning, I support the idea because much development has been put into this functionality. We better be using it or else it would just be a waste of time and money.

About the circular block chain — I would rather call it amnesic block chain but seems that other people before me have agreed on calling this concept a circular block chain. Nevertheless, it should not be difficult to build on top of NuBits as a kludgy hack. I might not know all about the internals of NuBits but as a developer I can say that deleting blocks from the beginning of the block chain should not be too difficult. The protocol has to acknowledge a maximum block chain length constant that when exceeded would trigger the deletion of the oldest block. The block that was appended to the block chain should probably include some important information about the block that is to be deleted. For example, the hash of the deleted block so that block chain validity could still be checked.


For every bank every competitor charges maintenance fee. For Nubits almost no competitor has demurrage.


I don’t see it as a worthy argument. It disturbs me that people get overly paranoid about demurrage as if it was something big and bad. Bringing Freicoin as an example is not a good idea because Freicoin and Nubits are too different.

I cannot stress this enough that there exists a healthy demurrage rate that everyone is willing to pay because it’s just so small (let’s call it near zero). We won’t be making any real money on that just yet but under the assumption that one day Nu is used by many people all over the world those maintenance fees are going to make a big difference.

There is no free lunch. Let’s say I’m a potential indirect investor of NuBits. I am considering whether to integrate nubits to my business or not. For that, I must quickly verify whether nubits has a reasonable business model or not. So, being technically ignorant, I will ask “where do you get the money to run this business?” and I get bunch of mumo jambo answers about the future when there exists a NBT/USD trading pair and B&C Exchange and people can take nubits as a loan from the nushareholders. All of those are hypothetical revenue scenarios that may never happen. However, if there was a clause in nubit’s business model stating that maintenance fees are charged from the holders of nubits I would immediately understand that Nu is a profitable business.

Nu offers a service which is a stable store of value. It makes all the sense in the world to charge for that service. In the space of cryptocurrencies, volatility is a nuisance and I can assure you, people will be willing to pay those fees as long as the fees remain reasonably small.


Being charged just for holding coins is rather unattractive to the average user, even though it is the same as spreads and transaction fees by nature.

Many large banks also offer to waive maintenance and even ATM fees, and make up the income by lending money. For some reason people prefer inflation more than paying a price up-front, just like how BTC users don’t seem to mind indirectly paying for expensive mining operations.

On the other hand, this is how I think demurrage would be useful. Banks usually waive fees if your account has some kind of financial predictability, e.g. reserve thresholds, regular income. Perhaps we can consider having short-term park rates off-set the demurrage rate to incentivize repeated short-term parking, so people will try to park as much as they can until they actually have to use the money. Using this we can gauge certain aspects of cash flow within the network, thus having more information to help us maintain the peg, without paying high costs.

YES! Finally some constructive feedback. The parking aspect has a key role in any demurrage implementation we might consider.

Here’s how we could do it: we hide the demurrage into transaction fees. We implement amnesic block chain so that blocks older than 5 years (for example) get deleted. As a result, you must destroy your coin age at least once in every 5 years. If you fail to do it, your coins will be forgotten by the network. Because most people don’t want their coins to be forgotten they would regularly destroy their coin age and pay the transaction fees.

The problem with the above is that 5 years is an awfully long period of time and we wouldn’t be able to control the “demurrage” rate directly. However, by doing this we would solve the block chain bloat problem, gain some media attention and secretly start getting income from forgotten coins and extra transaction fees.

The latter could be a good compromise between the opponents and proponents of demurrage. Ideally, I would introduce demurrage more aggressively, so that profits could be gathered every month rather than once in 5 years.

We could implement coin-age-dependent transaction fees. The older your coins the more you would have to pay to move them. The correlation should be exponential to keep the incentive of destroying your coin age rather often.

For example, you have 100 nubits. If you send them to yourself every day you would pay 3 nubits per month as transaction fees (hidden demurrage). If you send them to yourself once in every 30 days, you would pay 5 nubits. If you send them to yourself once in every 60 days, you would pay 10 nubits as demurrage. The default wallet should regularly send the coins to yourself so that the demurrage would be minimal.

It’s a pity that this topic has somehow died off. I think I raised some good points here that are worth reading by most shareholders.

Implementation seems difficult and it’s hard to gauge how much revenue this would generate. Is there any way you can run simulations with the existing block chain, or even make a rough guess as to what the financial repercussions would be?

I think nubits should have a circular block chain and then we would get demurrage for free — 2 birds with the same stone.