How about +20k? We’re at 62.5% buy and 37.5% sell.
Can anyone present some revenue figures here? - I almost lost sight of nubits custodians
What other product can we imagine?
Although I am in the camp that wants to be careful with treating NBT proceeds as revenue, there is the perspective that we might be taking it too seriously.
As @tomjoad partly implies, currency is a numbers game. Say there’s 10000 USD in town and then Jordan comes along with 10k NBT. People buy 10k NBT for 10k USD. Then suddenly both Jordan and the people who now hold NBT think they have 10k USD - which means there’s somehow 20k USD.
It doesn’t really matter what is in place of NBT - BTC or food (barter) or securities or other fiat. Just bringing about an alternative currency already implies a fractional reserve system, unless there’s devaluation of one side. BitUSD requires “300% reserves” but even so one has to acknowledge that 25% in their books was created from thin air, and relies on market principles to support that 25%.
Some of us want to think of Nu as a company that has to balance its books, and must be able to buy back every NBT it’s sold. On the other extreme, Nu can be considered purely a service that enforces a mechanism that keeps the peg of NBT as stable as possible while keeping itself afloat, relying on participants to “balance the books” themselves.
Real world currency management lies in between these two. On the “far left” - “book balancing”, it can be a company that issues private currency, or any small political entity that doesn’t have a comprehensive economy. On the opposite side, it can be a large country like the US that borrows money to buy tanks, fighter jets and build nukes, which are sometimes even lent to other countries, to get people to lend them more money, trying to be perpetually in the state of “just because we can”.
Both of them can break down; the left side basically uses accounting principles that are designed for relatively small entities to keep track of their finances, which can be rendered meaningless by external factors, and I don’t have to explain for the right side. Currency value is an illusion that kinds of lets you measure how much people want the things that can be bought with the currency, until it doesn’t.
Note that BTC and Ripple are basically on the right. By trying to balance to books somehow, even to a limited extent, and taking responsibility for the peg, we are already much more conservatively on the left compared to other cryptos. We can give ourselves a pat on the back for being more “honest” than our competitiors, and at this point I wish we can show for a strong ability to balance the books.
But one day we will become large, and NBT will be far out of our control for this style of maintenance. Ultimately we want to build a social force that supports a stable currency for a robust internet economy, and hopefully be rewarded for our efforts - so we need to look towards to right side sometimes, as that’s what’s needed when NBT gets big.
TL;DR: I do not support dumping NBT for dividends now, because we want to be as solvent as possible to keep track of developmental hazards (and partly for my selfish hope to be able to afford more NSRs before this gets big ;)), but I support, at least in part, Jordan’s long term vision of selling NBT for revenue.
The first part is what I think Nu is now and in the near future. The latter one might become of Nu as soon as it goes viral.
Then and only then I consider sold NBT revenue as then it’s unclear when (if ever) all NBT need to be bought back by Nu. A growing part of NBT will be used for payments and will not flow back to Nu in that future.
So I’d consider that a kind of revenue.
There is some way to go.
I wonder how Nu can make use of B&C Exchange once it’s finished and has some features like OP_CHECKLOCKTIMEVERIFY can be utilized to get to that future.
What about multisig custodians who sell NBT for NSR (and vice versa) and keep NBT and NSR in multisignature addresses at B&C Exchange?
Can OP_CHECKLOCKTIMEVERIFY send NBT and NSR to a burn address after time x has passed (to renew the custodial cycle and effectively balance the liquidity sides)?
Could that be a way to keep the Nu network liquid without external counterparty risk (the B&C Exchange default risk is with OP_CHECKLOCKTIMEVERIFY not existing) reducing the need to vote for NBT and NSR grants to the cycle of the OP_CHECKLOCKTIMEVERIFY or being triggered by NBT or NSR grants running low?
On a related note, there are 545,000 blockchain NuBits. 190,000 NBT are currently in the development fund, so that means 355,000 NBT are in circulation. About 175,000 NBT are held by B&C Exchange. This leaves about 180,000 NuBits in other hands.
Tier 4 buy side liquidity currently stands at 48,000. Tier 1 has 40,000 on the buy side. NuLagoon also has some in Tier 3 (around 10,000 I believe without looking it up). This means total liquidity for Tiers 1 through 4 is nearly 100,000 on the buy side. Park rates and NSR sales could provide additional buy side liquidity if needed.
If Tier 1 liquidity gets to be more than 60% on the buy side, we will balance it by selling development fund NBT for BTC. If Tier 4 buy side liquidity gets too high (such that the risk of it having a counterparty is greater than the benefit of quickly available liquidity) then we will need to discuss whether it should be used for a share buyback or dividends.
Edit: Nagalim reminded us correctly that parked NuBits were not included. This means 135,000 unparked NuBits are in circulation, excluding the B&C Exchange funds.
Most of the NBT are held/issued for development purposes - very interesting.
On that issuance of the 545,000 nbt, how much money did Nu make?
If we go by the logic that NBT roaming free are profit, we can calculate it. 180 kNBT free. Sell side reported in wallet: 22 kNBT. Tier 4: 48 kNBT. Parked: 45k. Not sure about the Tier 3 stuff, but that gives 75 kNBT completely roaming free (i.e. ‘profit’). With our 100 kNBT buy side, we’re doing juuuuuust fine. We could basically take everyone that owns NBT dumping literally all their NBT and still be able to pay off our developers.
These are facts we should be screaming from the rooftops.
I agree. Nu is in a highly solvent state and well-positioned to reach higher NSR prices in the future as NBT demand increases. I think the repercussions of the February exchange hackings have passed.
This is a good idea. I personally think we should consider changing the bar from a % of buy over sell to something like ensuring tier 1 sell is at least 50k. I would also like to point out that this is centralization (counterparty risk as Jordan clearly points out) and we should avoid such mechanisms in the future. We don’t necessarily have to eliminate tier 4 liquidity: it may be the case that as Nu grows we will keep a small percentage of our liquidity for continuous payment of employees. With B&C, we could timelock funds for periodic payment of employees and call this tier 4 liquidity.
Given that there are only several thousand NBT liquidity is on the NSR market, if we are to buy back NSR, it makes sense to do with micro increments – maybe 1k or 2k NBT at a time. It;s not micro managing. It’s just managing according to liquidity.
As far as I can tell, we have a straight up 25k surplus of buy side liquidity over the NBT marketcap. Liquidity is costing something like 100k/year. We owe developers 48k.
Can we afford 12k/year for a 1 kNBT distribution every month?
Is it the strategy reserve?
If the sell side is 22k, does it imply that 113k are currently held by users outside liquidity providers and unparked?
I’m not sure I understand the question about the strategy reserve. The B&C Exchange NuBits are in circulation and not part of any reserve for Nu. When we built Nu we had funds in Bitcoin and Peercoin, which turned out to be a real problem because most of the funds were lost as a result of Bitcoin and Peercoin price drops. Thanks to NuBits, that won’t happen to B&C development funds.
Your second point about NuBits in circulation outside of liquidity operations is correct.
In other news, Tier 4 buy side liquidity has risen to ~56,000. While long term we want to replace this reserve with liquidity funds placed in escrow by individuals on B&C Exchange, an interim plan is needed. The reserve ought to be big enough to handle any sales of NuBits over a two week period, after which sale of NSR for NBT and then burning the NBT could be used to deal with any reduction in demand for NuBits. Conversely, this group could conduct share buy back and dividends according to guidelines endorsed by shareholders. I will be writing more about this soon. It requires an extensive discussion among shareholders.
Now I think I got it. Those 175k NBTs are under your control but you are storing them already in B&C. Besides, those 175k NBTs have nothing to do with the 190k NBTs raised for B&C. Is my interpretation correct?
I am referring to below:
Any specific event coming in the next 2 weeks that will make people sell NBT?
The current Liquidity in the Nu network is:
42020 NBT on the sell side and 34982 NBT on the buy side.
buy side is getting lower than sell side, time to raise a bit the interest rates once again, i guess.
It’s totally health to have park rates now and again. If nothing else, it tells the community that the voters are still awake.