Resently, I read in this forum and some people wanna be a small LPC and get reward for their service. In Jordan’s latest post, he suggest give each LPC 1 million NSR for 30 days’ 20,000 NBT liquidity.
I disagree with all of those LPC’s proposal, here are my reasons:
Take Jordan’s post as example. 1 million NSR is worth of 5,000 NBT per current IPO price or 3,000 NBT per Bter.com price. And if it’s the reward for only 30 days’ 20,000 NBT liquidity, the interest is 15% monthly and 535% annually based on Bter’s price. Does’t it sound crazy?
Who pay for the reward to LPC? The answer is NSR holders. If you reward NBT to LPC, it obviously be NSR holders. If you reward NSR, which are from develpment team, it’s the same case that NSR holders pay for the reward. Because develpment team will issue NBT to compensate development cost in the future which are supposed to be covered by selling those rewarded NSR.
Do we need a 30 days’ 20,000 NBT liquidity? My answer is NO! It’s a very short period and doesn’t solve any problem. Keep enough buy wall on CCEDK and Bter is enough to peg Nubits at 1 USD.
I think we are lost in the forest. We should treat 2 things very carefully:
Be very, very, very carefully to add any additional Nubits(NBT) to the systerm. Especially for reward which can not be converted to buy liquidity. Because the value of Nu systerm depends on pegging, any additional Nubits add risk on this goal.
Nubits is a business, it means we should make profits from users or customers, buyers and sellers who use Nubits. When we pay reward to LPCs, they are making profits from shareholders. Making profits from shareholders is Ponzi scheme and won’t last long.
Based on the 2 concerns above, here are my suggestions:
Don’t give any reward to LPC and Custodial, whatever in terms of NBT, NSR or USD. LPC and Custodial must get profits form users and customers. The price spread on exchange platform could make this happen. And lots of exchange providers make profits from price spread. Take a look at this wensite: http://rchange.net . There are many similar websites over there, they do the same business.
Be focus on how to make profits from users and customers instead of reward from shareholders. Transaction fees, price spread and other ways can be discussed.
Learn how other successful payment processors operate. Lots of experiences can help Nubits.
Make some marketing effort with other business, for example lots of bux websites, which aim to pay for clicking advertisement.
I wish Nubits has a bright future!
I think the intention is to “get the fire burning” and make an active and competitive market for LPC’s… We’ve got a little bit of a chicken and egg problem. Not for these rates to be the norm…
I totally agree with @lg15x 's concerns and suggestions, if Nu wasn’t more conservative about the liquidity and reserve balance, Nubits will fail in no time.
I suggest to have a motion on this reward, as i wish Nu shares holders Not to approve any liquidity proposal unless they seem to fulfill a proven market need.
On the other hand, the alternative revenues ideas than the fractional reserve and selling unnecessarily liquidity, needs some more discussions IMHO.
LPC reward is needed in the adoption phase. I agree that revenue has to be made to run the system.
I think we should install NBT/USD bots at large payment processors such as rchange mentioned above. They are closer to NuBit business users than exchanges. And they have no shortage of USD.
Why LPC reward is needed in adoption phase? If we don’t distribute dividends and put all selling fund on buy wall, Nu won’t have any problem.
Take a look at how much trouble and risk Kiara had executing the first LPC proposal. How much LPC should get paid depends on their risks adjusted profit. Before a profitable LPC business model is validated there is great uncertainty whether any profit can be made. Nu net has to pay someone to do the liquidity distribution work.
btw Paying LPC NuShares is better than paying NuBits from the LPC grant. If the LPC sells NSR for NBT on the market, the NBT has been ultimately sold by a bot, therefore has USD backing in NuNet. If you get paid from LPC grant, these NuBits are not kosher – not sold by the bots and has no USD backing.
I know they have risk. But this is not a big risk for Custodial because NBT are granted from Nu systerm, not their own money.
For LPCs, I don’t think we need them at this moment, especially the very, very high interest.
I open this thread to let you hear many people’s voice who are in Chinese Peercoin Community. LPC’s proposals make people feel Nu is becoming a Ponzi scheme. I don’t think only Chinese feel that. At least, we give our competitors a good excuse to laugh at Nubits.
Dosen’t a small LPC provide his own BTC to provide liquidity?
There is risk when provide liquidity on NBT/crypto pairs, it seems one of LPC suffered loss on NBT/PPC pair. Am I right?
If you think the bonuses offered are too lucrative for being an LPC, then you should become an LPC and take advantage of it. So far, only one person has submitted a proposal that would allow them to claim one of the most recent bonuses offered.
Having a large number of LPCs is a critical part of the design. I’m sure both KTm and Jamie regret the low rates they offered for their services, and my guess is that they are not that interested in continuing as LPCs. Perhaps more importantly, using custodial grant funds as they are is not optimal because they have to be highly trusted and can easily walk with those funds, should they choose to. Having LPCs provide their own funds lowers the trust extended, protecting shareholders. No one has stepped forward to function as a true LPC outside of an NSR bonus program. It is an intimidating role that has risks associated with it. It is frightening to hand your money over to a trading bot you are not familiar with. Once people do it, it is no longer as intimidating and their risks can be quantified better at that point as well (based on previous results). They find they can operate profitably for much less than their initial high compensation.
Regarding the sustainability of LPC operations, the price being offered now is about 25% less than a month and a half ago. That is a very sustainable pricing trend. I have tried to make it clear that I expect the pricing to continue to drop rapidly, and I am confident it will. I have also proposed an evolution of liquidity operations that I am sure will lower costs even further than what would occur with our current approach to liquidity operations.
Some alternatives have been proposed in this thread. I encourage the development of those alternatives. However, we cannot wait for unproven alternatives to materialize. We need to develop a market for LPC services now. Not doing so puts the peg at risk. I believe offering the bonuses is a responsible action that can be expected to provide considerable benefit to shareholders.
If you believe shareholders are opposed to what I have done I suggest you advance a motion instructing me to cease offering such bonuses. If it passes, I will certainly abide by it.
This is really beautiful. I love how the decision-making process can be so decentralized via the motion voting mechanism. Thanks to Jordan for being so willing to defer to shareholders on a wide variety of decisions.
I think both Jordan’s and LG’s arguments are well grounded. I am more inclined to Jordan’s proposal. Vote to express your opinion.
I agree with Jordan, this is stopgap. NSR will be used up sooner or later. Just keep LPC working before we find a better solution.
Right now nubits is working as the designers have designed it. If it can be worked later in other ways, i think we can wait for that
I tend to agree, but this has nothing to do with LPC reward for risking their own money.
@JordanLee I would like to be a custodial, if you and your team agree. Here are my proposal:
- I want to get 20,000 NBT granted, and I will help for CNY/NBT pair on Bter.
- My custodial service is free of charge, I don’t need any reward for my service. I expect to earn profit from price spread.
- I don’t need Nubot, I will change the price manually. Since CNY/USD won’t change too quick, I can take the risk.
- I won’t generate any report of my trading. But I will make sure the buy wall plus sell wall equal to 20,000 NBT on bter’s CNY/NBT pair.
Let me know whether you’re interested in my proposal.
i think you have to make a custodian grant proposal and have to be voted in order to pass.
You propose to get 20,000 NBT from where? Since most of proposal are with the custodians’ own
Nubits thus the fee for the risk they take
There is no such pair afaik
NuBot is CNY-ready, no need to do anything manually. Is not only about changing price, is about having the network liquidity notified.
We can contact them to add this pair.
Sure. I still do not understand if your proposal is just to stimulate reflections or you are serious about it.