[Discussion] Alternative plan for Nu to wither this storm

[Dhume]

Please put forward a plan where you propose for them to sell their private BKS to buy NSR, let’s see how that works out.

[Sabreiib]

If a BKS auction can take place, operated by dev team, those Nushareholders who wanna sell BKS can certainly sell BKS in same way and they can buy NSR.

Of course, some nushareholders don’t wanna sell BKS, if Nu cannot receive enough help from its shareholders, it is deserved to die, why sacrifice the BKS holders?
@Dhume, you have many BKS, if B&C succeed and become 3 times cap of nu, your investment recovered. Don’t worry about BC dev fund, 150,000 is not a big figure for Jordan, but saving nu require more than it.

[nmei]

0. Nu needs to hold its BTC
1. Nu needs to burn most of its NBT
2. Offer debt swap: NBT for NSR
3. If nu is going to continue to provide liquidity as a service it needs a means of profit. It needs a method to continue creating fuel for this mystic engine
4. Raise capital

4 & 5 - I really don’t know the how. Lots of ideas around but every one has been shot down.

[Confucius]

I don’t mean to hijack this thread at all, it just seemed like an appropriate place to voice some thoughts.

I think we need to start thinking the way traders and accountants do. We need their language.

Goal Number 1 needs to be solvency. You can’t maintain a peg unless you are solvent. If no solvency, no peg, no Nu.

Goal Number 2 is getting the peg back. If we do it now, we would be pumping NBTs. There’s no other word for it, it happens all the time that coins are pumped for no good reason, we would just happen to have a reason to do it (only with no good scheme to dump following our pump). If we’re able to use network money to buy NBT and pump it, we might be able to dump it back and add some BTC reserves to the pile.

Until this plan of having service fees cover the networks expenses to create a ‘liquidity engine’ starts working, we need to cover the networks expenses with the ways that actually work in the crypto economy, namely, arbitraging and spread trading. We need to have some of the network’s liquidity be focused on market making for profit. And we need to be able to balance BTC trades across platforms, and/or keep most Nu money in dollars or dollar variable coins so we don’t get ripped to shreds when BTC makes a big move.

Ultimately, the idea of selling BTC when it’s near the floor and buying it when it’s near a peak does not make this a black swan event, but rather a swan dive, into a shallow pool. And I mean, this is the current plan IF WE RE-ESTABLISH THE PEG.

Nu is a player in the market, we forget this at our own peril. I suggest, instead of trying to come up with schemes to postpone our solvency problem, we ask people who are beating the market to HELP US.

I feel like a lot of plans here are scraping around for change to throw away and are part of the downward spiral, not ways to get us out of it.

[nmei]

I feel like a lot of plans here are scraping around for change to throw away and are part of the downward spiral, not ways to get us out of it.

Agreed. I like your thoughts.

[mhps]

I like the plan for most part. but there is no guarantee that there will be enough buys at the floor nsr price.

[ConfusedObserver]

I beg your pardon, if I confuse things. I’m still on my way trying to get an understanding of what’s happening here.
I was visiting the forum occasionally, but obviously not enough to understand. I changed that and read a lot in the last days.

I think we need to start thinking the way traders and accountants do. We need their language.

Goal Number 1 needs to be solvency. You can’t maintain a peg unless you are solvent. If no solvency, no peg, no Nu.

I’ve been reading in the forums with focus on accounting, because I wanted to understand the financial situation of Nu better.
I know exactly what you mean.
I was trying to get an overview of this liquidity engine and how much gas it consumes.
I found that there were huge trading volumes in the beginning of Nu, but I couldn’t find any information how much that actually cost.
I found nothing such as “daily costs of trading 100 NBT”.
I couldn’t find about development costs, etc.
The only transparent costs seem to be the ones for which grants have been made.

Goal Number 2 is getting the peg back. If we do it now, we would be pumping NBTs. There’s no other word for it, it happens all the time that coins are pumped for no good reason, we would just happen to have a reason to do it (only with no good scheme to dump following our pump). If we’re able to use network money to buy NBT and pump it, we might be able to dump it back and add some BTC reserves to the pile.

Before you can get the peg back, you need a plan that includes not only covering the operational costs to continue, but a plan to cover the liabilities over time.
Buying NBT cheap and selling them higher would indeed make sense.
The peg is at the moment and in the unforeseeable future not there. Make the best of that.
Pumping money int the current liquidity engine without knowing how much gas it consumes doesn’t make sense.

need to cover the networks expenses with the ways that actually work in the crypto economy, namely, arbitraging and spread trading.

Spread trading seems to be disliked by many here, who believe the spread needs to be as small as possible.
How will you make spread trading if you attempt to make the spread tight?
Aren’t you fighting yourself?

Regarding accounting:
I think one major issue was that FLOT wasn’t created in a much earlier stage of the network or JordanLee provided you with accounting information.
If FLOT had controlled the development fund and paid for expenses (development, gas for the liquidity engine) from it, accounting would have been possible.
You’d have known about the situation all the time and not only in the last months.
For a long time the only person knowing about the financial status has been JordanLee as it seems.

I feel like a lot of plans here are scraping around for change to throw away and are part of the downward spiral, not ways to get us out of it.

Without a proper business model you can’t save Nu. Without revenue a debt-equity swap may postpone the complete failure, but can’t prevent it.

From what I understand, both a debt-equity swap and trying to buy cheap NBT are important parts to reduce the liability.
A falling NBT does not only have drawbacks as it seems.

If you can reduce the liabilities enough and create a revenue scheme (fees, spread trading, other ideas), there might be a chance for you to continue.
But tell me: even if the fee, which consumes x% of the NBT per year gets developed - how will you calculate x?
You need accounting!
Speaking of accounting: where’s the accounting of Blocks&Chains Exchange?
Are you making the same mistake there?
Who holds the development funds?
How much is spend for development?
Want to learn from the mistakes that were made with Nu?

With annual fees and spread trading, NBT won’t be as stable as it has been since its inception - until it failed two weeks ago.
But NBT will have a chance to stay as stable as it can without being on the road to perdition.
With an inflation rate of x% per year (on top of USD inflation) and friction when trading it, there’s room for revenue.
If x and the spread can be chosen small enough to give people reason to still use NBT (USD like, but no KYC, AML) and x and spread are still big enough to make revenue and keep Nu solvent, you might have found a sweet spot to continue and grow again.

Does make any of it sense?
I just tried to sum up some of my impressions, that I had when I read a looooot of posts here.
This post from Confucius caught my eye. I haven’t read anything I could remember from him in old posts, but with this post I agree a lot and wanted to give you my opinion, although you didn’t ask for it.

[mhps]

A lot of what you said make sense. Please keep asking those questions.

[Confucius]

A falling NBT does not only have drawbacks as it seems.

Agreed! The low price may be just the opportunity Nu needs to regain some stability. If we could buy back a lot at .40 on the dollar, we’d be in much better shape.

[ConfusedObserver]

Sigh, I was really unsure if I lost my way, because what I wrote doesn’t fit to so much around here.
So I didn’t dare to write or ask, but Confucius’ post motivated me to try.

[nmei]

Sigh, I was really unsure if I lost my way, because what I wrote doesn’t fit to so much around here.So I didn’t dare to write or ask, but Confucius’ post motivated me to try.

Thank you for posting! You are spot on.
I make sure my books are balanced every week at my house. But we weren’t enforcing that here at Nu. At one point we were talking about P&L for Nu, but we never gave it the focus it needs.

I agree completely:

• Accounting
• Profit streams

Profit Streams proposed:

• Deflation/Inflation of x% year
• Spread

[ConfusedObserver]

At one point we were talking about P&L for Nu, but we never gave it the focus it needs.

I’m pretty sure I’ve found that thread, but didn’t spend much time for it.
It was incomplete information, a lot of guesses, but no accounting!

Where are the development and marketing costs? They are mentioned in the initial post, but nobody asked for them?!

[cryptog]

You must be talking about this thread: Monthly P&L of Nu

I agree. It is crucial for a company to keep track of P&L.
But I gave up at the end tracking because it s very difficult to keep track of revenues.
NuBits can be brought to market and then brought back to FLOT or whatever and this is too difficult to keep track manually.
Nu is trying to be a central bank, which is the most mysterious and hidden business on Earth.

[ConfusedObserver]

NuBits can be brought to market and then brought back to FLOT or whatever and this is too difficult to keep track manually.

It’s easy to know the blockchain NBT.
If you subtract all NBT that are not in circulation, but an asset of Nu, you know the liabilities.
Add up the assets Nu holds and you can calculate a total debts to total assets ratio.

In a nutshell:
if this ratio goes up, you make loss.
if this ratio goes down, you make profit.

This only on a high level and doesn’t tell you where you make profit or loss, but it shows you where you are heading to and can easily be automated.
The buyback calculation shows it can be automated.

With this simple ratio, you could have seen that you are on no good way.
It was important to get rid of the volatility risk of the asset BTC. Trading them for NSR was a bad move. It did relieve you from BTC volatility, but didn’t relieve you from the volatility risk.
It switched it to NSR, which never had real trading volume and was not more price stable than BTC.

Those who sold NSR during the buyback can buy NSR soon at one fifteenth or less - if they want to buy NSR at the moment.

Without a credible revenue stream there’s no way out of this crisis.

[mhps]

Do you agree what i replied in the P/L thread here ?

since the buyback calculator knows both dynamic reserve and outstanding_NBT, if i was correct iin the post, asset minus liability can be easily calculated in realtime.

For example the latest buyback calculation shows
685497.813500 NBT are outstanding
dynamic reserve is just any crypto in T4, now equals $15094.537848

dynamic reserve - outstanding_NBT= 15094.537848 - 685497.813500 = -670403.275652 nbt

Last week it was
dynamic reserve - outstanding_NBT= 11274.372754 - 710197.995900 = -698923.623146

the change of the difference is
-670403.275652 - (-698923.623146) = 28520.347494

So last week Nu was able to increase its asset minus liability by 28520.347494 nbt.

Are the above correct ?

@Sabreiib @cryptog

[Sabreiib]

Right, that’s equity, also called net asset.

[mhps]

that’s equity, also called net asset.

What I don’t know how to calculate is the asset value of Nu’s infrastructure that took Nu’s funding and community contribution to build – wallets, block explorer, official websites, liquidity pool ops server and clients, tools of many kind … basically everything listed here.

[Sabreiib]

These are relative difficult to calculate, but since they cannot help us providing money… Nu runs out of cash, it’s the cash flow issue and reflected also in equity-liability report.

[cryptog]

asset minus liability by 28520.347494 nbt.

So the liability has decreased because we purchased back nubits from holders and put those nubits into FLOT addresses.
That buy back is equivalent to 28k NBT roughly speaking.

[mhps]

i haven’t looked into the details but i think the 20 btc returned by CCEDK, nsr sales, and btc returned by @masterOfDisaster’s gateway may be the main part of the reduction.