I do think this is interesting but I still cannot fathom how the protocol can keep track of exchange rates at a quick enough pace without resorting to external oracles or centralized data feeds. Perhaps it’s a moot point, but we’ve already had a glimpse of how difficult it is to appropriately scale parking rates in response to evolving market conditions.
Third-party services will help, but I’d be very, very wary of direct integration into the protocol layer.
How do we capitalize on this money? Jordan is already auctioning off NSR. We have no NBT reserve.
I don’t like the current burn system, I also think it’s not fully functioning, but it’s new. I argue for decentralized burns whereby the market could burn at will based on prices that voted on by shareholders like park rates are. In this system, if you have 10,000 NBT and you try to manipulate the price of NSR down, you will need to spend far more money in NSR to convince the shareholders the price is lower than it would earn you. If the peg were to fall, people would burn NBT for NSR and the NSR price would go down some, sure, but that’s not manipulation, that’s as it should be. Then when you burn your NBT for NSR, you will get more NSR, but NSR has been diluted and it’s not worth as much. We encourage this kind of gaming of the market, as we will often win if we keep our spreads big enough and it helps feed adoption and evolution.
Liquidity Pools take a NBT loan out and give it to trusted members to distribute amongst people who are providing money to support Nu. It sounds like we’re already doing this, we just don’t put our NSR up for collateral. How would this work with the staking system, vital to the protocol?
This is exactly the revenue model that we should build on. And this does not in any way substitute the current design. Its just that every shareholder has at any time the possibility to create X NBT by burning a security of Y NSR and will get the full Y NSR back if X * (1 + r) NBT will be burned within a specific duration.
This means every shareholder can lend money from Nu according to the base rate as specified by the shareholders. A shareholder therefore becomes a bank and can make a profitable use of the available amount of NBT, just as a bank gets its money from the central bank to make its business.
The whole (expensive) Nu infrastructure ensures you that your funds remain stable in value, while you have all advantages of a crypto currency. This is a product worth using today I think.
All NSR holders are members of the board of directors. They are live people and perceive in the first time how NBT/NSR fluctuates. Assume you’ve pledged 3$ NSR to borrow 1 NBT, during one week, NSR price may drops to 1/3 price, or the NBT demands may flautuate to a level that we need to change the supply.
The problem is voting costs one week to execute, why not add another voting mechanism by private key signature?
There are maybe two private key , one for transaction, the other for vote.You make a vote private key with transaction private key on an offline computer(cold staorage), and use vote key online to sign a vote, it says “My 10 million NSR vote for 1000NSR:1NBT”, your vote broadcast to the whole network within minutes on blockchain. In this way, NSR holders can change pledge ratio from 500NSR:1NBT to 1000NSR:1NBT within one or two days if holders are diligent. Remember that holders don’t need to do that daily, they just do it when needed, perhaps once per month, even per season if NSR price stable enough? BTW, I suggest we port emeth’s message app into Nu so that holders can get intime operation message from VIP.
Assume one day later, new ratio take effect. At this time, some old contracts are due and the new NBT supply halved, we don’t need to pay money to others for parking at all.
This sounds good, now that I think about it. I’m still concerned that it provides a disincentive to hold NSR, however, given random a stable NSR price and burn rate. Maybe it could be offset by a higher minting rate, such that the NSR supply tends to inflate more and burning your NSR at a fixed rate tends to be bad compared to minting it.
I.e. you don’t win unless you get lucky or you make some use of the NBT. We don’t want people burning their NSR, parking the NBT, and getting the NSR back when NSR is worth more, along with some extra NBT, do we? Did that person actually do anything for Nu?
I think its more more appropriate to vote on a pledging rate continuously, i.e. in every block / minute and to take the weighted median over the last 1440 blocks (1 day). This doesn’t have to be very accurate, as long as it is significantly larger (x3 or more) than the market price of NSR. They use just their regular private key to mint blocks and write their rate in it.
This sounds interesting. I already thought about an optional layer on top of the Nu peer2peer network that simply allows to query motion texts from hashes, which would fall back to a very simplified torrent protocol. Distributing motion proposal texts based on their hash would already be a great feature.
This probably should be avoided, although it really starts to get complicated at that point. While your scenario clearly leads to an NBT dilution, it also clearly provides a buy incentive for NSR, because people need them to take this offer. So maybe this could even make sense if NBT demand is high.
NSR are “gold” in holders hands, and they use the “gold” as backing asset to issue a paper money(NBT). When they pledge NSR and get NBT, in protocol’s eyes(central bank), some NBT issued. Then they may lend NBT to someone or provider liquidity with the reward of more “gold”(NSR). Why do you mint NSR? This is the incentive.
This kind of burn is similarity of pledge ratio voted by NSR holders.
We are currently paying around 0.25% per day for our liquidity and we are aiming to get around 100,000 NBT total liquidity. This will cost about 250 NBT per day. Parking adds some additional NBT to that.
We pay 250NBT per day for liquid providers and some NBT for NBT parking.
I suggest we pay nothing to them and do it by ourselves, if one as a NSR holder won’t do that work, get diluted.
Good idea, and this costs little modification to protocol, yes we can tune the period, one week, one day, one hour ,one month etc as needed.
In your system, who votes and provides the proof of stake security? I feel like you are telling me your system doesn’t work with current protocol at all. Who verifies transactions?
The incentive which drives NSR holders to mint, is the same as that drives NSR holders to provide liquidity---->more NSR.
But if I can get more profit by providing liquidity, I won’t mint. But if we increase minting rates to increase incentive, we get hyperinflation of NBT. It’s a risky game, and at no point do we want the network to be vulnerable to the plethora of attacks that come from a single entity holding a large minting stake.
It’s an interesting idea and it can work to some extent, as it is similar to how bitUSD is pegged – someone pledges some Bitshares (300%) and gets to create bitUSD. However BitAssets seems to be in a downward spiral (except for bitCNY) because, I think, the underlying asset (Bitshares) is losing value against the assets bitAssets are pegged to.
Nu is less complex and has marketmakers (LPCs) to provide Nubits user liquidity. It’s an user oriented coin. I think we should keep it always in mind that no type of shuffling between NBT and NSR will do much good if we don’t find ways to make users pay fiat (or real world assets in general) for Nubits/Nushares.
When you mint or provide liquidity, you get more NSR not extra NBT, so the reward has nothing to do with NBT’s inflation.
A single entity holding a large minting stake probably wont suicide since it is the most victim of the attack. This is the PoS common knowledge.
Bitshare is 300% fixed pledge which cannot control the bitUSD supply effectively.
when underlying asset(NSR, BTS) loses value, the ability of issue stable money(bitUSD, NBT) also decreases.
Let’s look back and compare the Market Cap of NBT and NSR since Sep 2014, is NSR insufficent to back NBT? Usually NSR value is enough.
But there must be some abnomal senarios that NBT demands very high and exceeds NSR market, when this happens. We produce extra NBT from thin air just like Kiara did few months agao, it is emergency measure and I don’t belive it last long because the free market not fool:
It’s not an issue of suicide, it’s a question of someone having full control and printing infinite NBT for themselves. If they can fork, they can do whatever they want. I do not trust centralized PoS.
This is currently true, we don’t need to change protocol at all to have this. Burning in any form makes this effect more direct.
When my loan comes due, I’m going to look at the NSR/NBT conversion ratio the loan was taken out at and compare it to the market price for NSR. If it is higher, I’ll take the NSR back. If it is lower, I’ll default on the loan and go buy the NSR on the open market. In either case, the shareholders that are voting and participating in the system lose.
Hopefully normal, actually abnomal.
BTW I believe 2millions USD value NSR in people’s hands, but I doubt nearly one million NBT also in people’s pockets. The Nu wallet says only 100,000 NBT @sell/buy wall, perhaps some NBT on 2nd, 3rd lines are invisible. Anyone could clearify it?
Please read the link I gave and what Jordan said quoted by Sentinelrv above to understand how it works.
[quote]1. When NuBit demand is low, NuShares will be created and sold while NuBits will be purchased with the proceeds and burned. NuShare supply increases as NuBit supply decreases. This depresses the NuShare price as it supports the NuBit price to the pegged level.
What Jordan said here is similairty of pledge scheme, when you burn NBT for NSR, actually you lower the pledge ratio so that NSR holders can borrow less NBT from protocol. When you pledge NSR to protocol, you actually burn it, when you return NBT to protocal, in fact you burn NBT.
One point I disagree with jordan is the NSR buying order cannot maintain NSR price high for a long time, when Nu launched, you said the PPC dividend bought from market will lift PPC price, yes, it lifted, but only briefly and then fell again.
The free market is watching Nu, the operation status is critical for NSR price, you cannot play trick with NBT/NSR dual direction burning to manipulate NSR price. Grab the hair pulling themselves, does not work because they(hands vs hair, NSR vs NBT) are internal effect. If nu wanna becomes successful, it must absorb more FIAT from OUT OF Nu system as my picture shows above.
For me and perhaps many potetial investors, Nu DAC/DAO is a money-losing company,and if we couldn’t find a proper renenue way, the endless expenditure on liquidity providing/Parking will kill Nu sooner or later, is this campany’s share very valuable? I am not sure.