Another paid article about BitShares?

[Sabreiib]

My suggestion is that, turn NSR holders into “slaves”, force them/ourselves to work freely, otherwise, any NSR holders without liquid providing will be diluted/robbed by other NSRer.

[Sentinelrv]

I understand the way you have suggested for a while now (pledge NuShares to get NuBits for liquidity providing, then receive NuShares reward once you bring the NuBits back), but I just can’t seem to root for it because I don’t want to risk my NuShares like that. I think I would rather be slowly diluted than risk them all. Even better, I would rather find another way to pay for the pool interest over time through other sources of income as Woolly suggests.

[Sentinelrv]

I agree with both sides. The current method of printing NuBits to pay for liquidity is unsustainable in the long run. It is, however, a necessary evil at this point in time. The liquidity pools are a valuable step in the evolution of Nu. They are a direct response to the losses incurred in February and are the best method we have at the moment to defend the peg. I see them lasting for as long as is needed to get to the point where liquidity risk is practically 0 and Nu is able to pay for it with profit made elsewhere.
We are in a difficult transitional period. The only way we can pay for liquidity is with the grants. I hope that won’t be the case for long but for now it is the method we have.

Agreed. Services will need to be built onto Nu to bring us extra income. Hopefully we can figure some out over the next year.

[Sabreiib]

Woolly’s suggestion on income? Any link?

[Sentinelrv]

Woolly’s suggestion on income? Any link?

No. This is still something we would still need to figure out. We would need to figure out some blockchain services we can add to Nu to bring us extra revenue (Possibly revenue streams other than blockchain services as well). There is nothing planned yet as far as I know. To me, Nu is continually evolving. We’ll continue to solve problem after problem as they pop up. It just takes time though. Think of where we were when this all started back in September and how much it has changed since then. That evolution will continue until we’re completely sustainable.

[woolly_sammoth]

No direct suggestion yet I’m afraid. All effort for the last few months have been on decentralising liquidity provision in response to the February losses.
Now we have that, effort can be redirected to developing income generation. It’s the place we should have been a few months ago but events overtook us.

[mhps]

income

I believe the real income for Nu is in the real economy. Meta economy of the cryptoworld is rather limited.

Nubits is pegged to a real world currency. It’s strength is in helping the real world business with Nubit’s comparative advantages against other cryptocoins and e-currencies (e.g. OKcoin-USD).

[crypto_coiner]

Nu community is I feel too humble in its marketing and of course has no public evangelists.
We need public evangelists paid by custodial grants.
I would be ready to become public if the grant is sufficient.

[Sabreiib]

Once we use up the undistributed NSR, not much time left. We can issue more NSR if needed, but that will hurt NSR holders because the auction proceed is not for software development etc(adding value to Nu)but just for covering our endless spending on liquid service.

[creon]

Let NSR holders themselves provide liquid and get extra NSR, since we do the job ourselves, there is no cost.

You can never count on a collaborative incentive, we somehow need to encourage the single shareholder or its not going to happen. I agree with you that the current situation is a vicious circle and a proper revenue model should have been developed using the money that was spent on dividends, which was just thrown out of the window without thinking about a tomorrow.

However, I think if (and only if) shareholders are willing to dilute and devaluate their shares further to reduce this liability that was and will be created now through the B&C development, then there is a chance that the whole thing will still bootstrap. It just depends on the people behind the project.

[Nagalim]

The concept of printing money and controlling interest rates (parking) is not something new; the federal reserve does exactly what Nu does. If Nu is a ponzi, so is fiat.
When we are in a bear market, park. When we are in a bull market, distribute dividends. To keep daily volatility working for us, we should introduce decentralized nbt/nsr burning. In the absolute long term, the cure is adoption and loans, just like banks use. Nbt in circulation is nbt not being dumped on the wall. Also, we can loan say 100nbt today and ask that the business burn 101nbt 3 months from now.
Finally, transaction fees burn some extra nbt.

[Sabreiib]

How can we encourage NSR holders to mint? Dilution.
How can we encourage NSR holders to provide liquidity? Dilution.
The dilution rate may be voted by NSR holders, this is a trade off.

Assume that all NSR holders join in liquidity providing, after some time, all of us double our NSR quantity and assume NSR Cap. remain same, the NSR price halved, but each one remain same value of NSR.

Naturally some NSR holders refuse to provide liquidity, then they get diluted, a portion of their value goes to brave holders accomplishing risky task(on decentralized exchanges), it is fair.

Probably after quite some NSR holders hard work, NSR cap. rises, that benefits all.

[Sabreiib]

We have no state apparatus to force people to use NBT, so mimic FIAT fractional reserve is a bad idea.

I won’t buy a single NBT as long as it’s fractional reserve.

[creon]

I see you want to shift the compensation from NBT to NSR. This is a good idea imho. You could even imagine both products running simultaneously, i.e. an NSR pool and an NBT pool where the NSR pool should be slightly more lucrative.

Aside from that I also still think that parking rates should always be paid in NSR and never in NBT.

[Nagalim]

Any money Nu spends can be considered an inflation rate (in nbt or nsr, assuming we implement proper burning). The entire business of Nu is about dealing with that inflation rate. There are many strategies for it and we are not going to find a catchall solution for Nu’s entire future in this one thread.
Nsr is not doomed to continually go up in supply and down in price like you suggest. Nbt supply will increase as NSR marketcap increases because its backing asset is growing. In return we can distribute dividend, increasing the value of a nushare directly and causing an even higher nsr cap and more nbt supply. As you can see, we have positive feedback loops as well as negative.
The future of Nu is full of possibility. In the short term, we are trying to put together an entire economy out of thin air and need to have high interest rates if only for proper software development. That is just what is healthy.
I edited your picture to add the profit sources, as well as 1 more inflation source you missed: minting. I forgot to put anything in about parking or distribution, but those are more like feedback loops, as I’ve mentioned.

[Sabreiib]

parking rates

I don’t think we should pay others for parking at all, if we pledge NSR to get NBT for liquidity, when NBT demand decreases, we just vote a lower pledge ratio, while old pledge contract ending, the NBT will naturally return to protocol. Again, we shrink NBT supply by ourselves, no cost.

[Nagalim]

shrink NBT supply

Nu needs to be able to borrow from tomorrow because it is still very young. Your method of only paying nbt if nsr is given as collateral is not a business model: it is a service. This has already done by BTS and I don’t see how we’d improve upon it much.
With burn rates, we can economically accomplish what you intuitively desire. We can keep the nsr market cap above the nbt market cap by offering relevant burn rates.

[Sabreiib]

Nsr is not doomed to continually go up in supply and down in price like you suggest.

If we exclude speculation of NSR which causes the NSR price volatile, the NSR Cap. should be relative stable, if you double NSR quantity over night, in the morning NSR price should be halved.

Of course we always dilute NSR for some reasons, if Sunny King wanna join us by requiring 10million NSR, we vote to issue extra 10million NSR to him, if the market perceive SK will add a lot of value to Nu system, the price may not drop or even clime up.

What I wanna say is NSR Cap. is not infinite source which can be drained endlessly.

Nbt supply will increase as NSR marketcap increases because its backing asset is growing.

NBT and NSR help each other, chicken or the egg.

[Sabreiib]

Burn is a similarity of pledge(you call it BTS style), when I pledge my NSR for NBT, to some extend I actually burn NSR for NBT, and when I wanna take back my NSR collateral by giving out NBT, I burn NBT for my NSR. The only difference is how can I get back my NSR on same ratio.

As far as I known, BTS has a fixed pledge ratio which is ridiculous. In my suggestion, the pledge ratio is flexible through which we control the NBT supply.

[Nagalim]

chicken or the egg.

That’s what I call a feedback loop. Distributions will increase NSR cap in an intangible way not directly related to the NSR supply.

The only difference is how can I get back my NSR on same ratio.

Why should we let you get it back at the same ratio? NSR/NBT is essentially just the price of NSR. Why should we give you the same pledge rate going in as coming out when the NSR price has fluctuated in the mean time?
Also, I advocate for the burn model such that anyone (shareholder or not) can take advantage of the burn rates. I do not advocate requiring liquidity providers to burn NSR to make funds for their own operation. I think we should print those NBT ‘out of thin air’ as a loan against future Nu operations.

Liquidity is a cost for Nu. There are many other concievable sources of profit, including Tx fees, Burn spread, NBT loans, Adoption, and others we haven’t thought of yet. Anywhere a bank makes profit Nu can stand to make profit.