[Discussion] Alternative plan for Nu to wither this storm

NuShares Motions
#1

So we know what @Jordanlee’s plan is to get Nu out of this mess it’s to put up all funds we have left at a tight spread with the hopes of getting T5 and T6 going again. While I’m doubtful that this would have worked ½ weeks ago at this point in time and in the current situation Nu is in I don’t see this working anymore. NSR price is in freefall and any funds we put up at 1% offset get bought up immediately, even if this would have worked before investors and speculators are too scared to fuel either T5 or T6 at the moment. With this I present an alternative plan on how we can survive the Bitcoin halving (roughly 6 more weeks) and get Nu solvent again.

A central notion is the thought that having a weakened peg is better than no peg at all. I don’t believe a weakened peg is useless as some of you seem to do. While a weakened peg is far less than ideal or desirable I feel its highly desirable over a floating currency. Even with a weakened peg people that are in dire need to cash out have the ability to do so. When looking for new money it will be far harder to sell a nonexistent peg that is in free float then it is to sell a weakened peg while we’re in the unusual situation of a Bitcoin pump. Even with a 0.95 cent peg if park rates are high enough it will still be profitable to park, that should be far more appealing to anyone then not knowing if the bought and parked Nubits can ever be sold again.

  1. Here’s my plan, we put up the majority of funds at a 5% offset so far it seems that this offset is high enough for funds to last a while before they get eaten, this buys us time to raise more funds. I’m not against putting up small amounts a 2.5/3% offset and even smaller amounts at a 1% offset to test the waters.

  2. We raise more funds to defend the peg, I’ve suggested a BKS auction to raise a good amount of funds. Next to this I propose a shareholder pledge in which anyone willing can pledge to buy 1k USD worth of NuShares priced at a 100 Satoshi. If these 2 methods are successful we should raise substantial funds to defend and tighten the peg again.

  3. In addition to step 2 we keep putting up NSR for sale at the open market, however dumping them until they are worth 0 is suicidal. Who is going to buy NSR knowing that the next day we’ll put them up even cheaper? No one in their right mind would buy something that gets a discount every day. I propose we establish a minimum price and put up a sell wall and refill that wall if it gets eaten (I propose 150 or 200 satoshi as price).

  4. We keep advertising parking rates and keep the rates high enough that a decent profit is to be made even with a 0.95 cent peg.

I believe with the above 4 steps we can at the very least maintain a 0.95 cent peg until after the halving which hopefully leads to a Bitcoin decline and an increase in Nubit demand.

Edit: I would like to add the plan to let Nubit holders burn their Nubits for NSR as an additional step.

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FLOT NSR Operations (buy side)
Current Liquidity
FLOT NSR Operations (buy side)
[Draft] 1k USD shareholder pledge to buy NuShares
Our options to save Nu - June 25th, 2016
#2

I’m a bit uncomfortable with very high park rates & big spreads as it seems close to becoming a kind of Ponzi scheme; people can buy in & expect to cash out later with more money than they started with as long as new people are putting in more money to also hopefully be able to cash out with more money at a later stage.

It may work as a short-term life support for the network, but it may also undermine confidence.

Increasing supply by paying interest at a time when the peg is under serious pressure seems fundamentally flawed.

Can anyone explain why big spreads + high park rates is clearly not like Ponzi that would collapse if people stopped entering at the bottom of the pyramid?

Edit: didn’t mean to be all negative: the ideas of auctioning BKS, shareholder pledges, and selling Nushares with a price floor sound good to me.

#3

It is exactly that a short-term life line to get us through the halving (roughly 6 weeks). This will also get us closer to the release of B&C Exchange, both events I suspect will increase Nubit demand by a lot.

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#4

Don’t expect the halving to save Nu. Whether BTC goes up or down, it won’t matter to Nu anymore, because Nu soon won’t own any BTC! :stuck_out_tongue:

I know, I know, the assumption is that traders will want to buy NBT sometime soon, if their favorite crypto is falling in value. But that could be little more than wishful thinking.

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#5

Why would you reckon that is true? Traders will still want to trade out of Bitcoin if we manage to put up some decent walls in the meantime I dont see why part of them wont use Nubits to take profits like they have done in the past.

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#6

It’s just my best guess, based on recent events. I could be wrong. Also, it’s lunacy to presume to know, with any degree of confidence, what will happen to the future price of bitcoin.

#7

I can get behind this plan. The NuShare pledge to buy should be continuous I think right? Anybody can buy at this price at any time, whether it’s tomorrow or 2 weeks from now when I get paid next. It would allow shareholders to continue supporting the peg with their own money by buying NuShares. I’m buying because I don’t want to be diluted at all. I’m sure others feel the same way and will feel forced to contribute funds.

If only we can make it to this, we have a chance. It would hopefully bring in some demand, which will fill up our BTC reserve somewhat. That Bitcoin and liquidity can then be safely placed on the exchange to encourage trading. As I mentioned in my thread here, I think Jordan may have only planned on moving us into the zero reserve model temporarily until B&C was finished, since keeping zero reserves is too expensive in our immature state. It was all to prevent our reserve from getting stolen by centralized exchanges. We needed to protect our funds until B&C was completed, where we could then transition back to the reserve model until the network becomes more mature.

#8

It’s main goal is to raise as many funds as possible as soon as possible to reaffirm the peg (even if it’s a weakened one).

For Jordan’s model to work there needs to be a strong confidence in the peg and a significant increase in Nubit transactions (which can’t happen with Nu’s current scale). We might be able to do this someday but definitely not today. The confidence is lost and the market to tiny to support a liquidity engine as envisioned by Jordan in my opinion.

What we need to do is salvage what is left of the peg or reaffirm it as good as we can and raise funds to make it through the Bitcoin halving while remaining as solvent as we can. Never in Nu’s lifetime have we seen a BTC rally like the one we have seen in the past few weeks, we clearly weren’t prepared enough to withstand. We need to take measures now to keep the boat afloat and make sure we takes measures to prepare for the future (decrease costs, increase reserves, get the liquidity engine running and increase demand).

#9

I agree. I now don’t think putting all our funds into a 1% spread would have helped much, especially not now. Confidence has been damaged too much for it to work. We’re too weak at the moment to restart the engine and the funds would have evaporated into thin air very quickly. We need to do what we can to try to stay afloat.

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#10

Do we have enough NuShares now, or would we need to pass a grant? How many do we have left to use for this?

#11

We currently have over 20 million NSR in the FLOT multisig and I believe a motion is live to generate an additional 100 million we can use for sales. In the meantime we can put NSR at a minimum price at Poloniex and people can start pledging funds, I hope we can start fulfilling pledges within a few days! We still need an auctioneer to conduct the pledges, if no one else is willing I would be willing to act as an auctioneer.

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#12

I just looked on NuExplorer and the vote for the NuShare increase is not doing so hot. It’s actually trending down. People should be voting for this in case we actually need to sell more than the 20 million. We don’t want to have to wait a whole week for the grant to pass.

#13

I think a lot of shareholders are probably tired and not up to speed of all the things being discussed in the last few days. We need to make sure the data feed providers add it to their data feeds!

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#14

We’ll need a grant for BKS to vote on as well. What else here needs a motion to authorize specific actions to carry out this plan? Park rates can be done independently by shareholders without a motion, so no need to include that.

#15

  • We need BKS holders to vote for the plan and generate a BKS grant.

  • We need NSR holders to approve of selling NSR at 100 satoshi to funds raised by the BKS grant and to sell funds to pledge takers for a 100 satoshi each. This aside from voting in the 100 milion NSR grant (although I feel the NSR selling is done at discretion so consensus seems good enough without voting to me).

I think this is all we need in terms of motions.

Edit: If we can raise about 50k USD I feel that would be enough to get us solvent again (at 0.95 cents) and through the halving. However we need shareholders to voice their opinions, my plan needs broad support by the community to raise enough from pledges and to reach majority vote by BKS holders.

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#16

Hell, I’ll sell all my Peercoin to support this. The price has been low forever, so hopefully I’ll have a chance to buy it all back. That’s about $2,500, plus whatever I get paid tonight, minus bills. I might have about $3,000 in total I think. Plus I own about 1% of B&C, so I’ll definitely vote for the grant, since I’ll get more NSR from that too.

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#17

In a Ponzi scheme, people are told their money is safe, and they are told the returns they are getting are from investment gains, not from new suckers joining.

In Nu, no one is hiding that Nu is in dire shape and that this is a risky, speculative bet, and they can see that the extra Nubits are being created, not earned. So I don’t think it is a ponzi.

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#18

I like this as a short term crisis response plan, but since you wrote it, nubits have dropped significantly (63 cents as I am writing) so I don’t think we should put a specific value for the peg.

Here are my thoughts

On 2 and 3:
We should pass a motion the allocate a large quantity of NuShares (equivilant to 20 to 25 percent of total existing nushares) and sell them as quickly as is feasible (either have FLOT sell them or have another person/persons take responsibility) direct to procedes to FLOT to implement this plan. “As quickly as is feasible” doesn’t mean we should sell them down to zero, I like your idea of a floor price and the shareholder pledge.

On 4:
Raise the parking rates for durations of 1.5 months and longer such that people believe that they can buy Nubits for market price, sell them at the end of the period and earn enough interest to make up for any loss of principal and provide them some profit. High rates at a very short duration (days to a few weeks) won’t help because we will still be in crisis when the park time is up. Nu shareholders must implement this.

On 1:
Instead of committing to a specific target, we should lay out how we will use the reserves so that people understand what are actions will be. As they say, the markets hate uncertainty, so tell them the plan.

I’d suggest a plan like this:
Commit to keeping the peg as tight as possible without completely running out of reserves.

  • put 20% of the reserves at the current price
  • put 30% of the reserves 2.5 cents below the current price
  • keep 50% of the reserves off the buy “wall”

Whenever the top offer is used up, the second offer now becomes the top offer, a new second offer is put in 2.5 cents below it, and we reset the percentages to 20/30/50. If the market turns against us, we want to have an orderly withdraw.

Whenever there is more than there is more then some specific amount in other buy offers above ours, raise the top offer a small amount. Do this no more often than every few hours. This lets us inch the price up as people gain confidence. eventually we want to get back up to $1, but that will take a long time.

Whenever we raise more bitcoin, refill the offers as much as possible.

We don’t have to convince people that if they buy they will be able to sell at $1, all we have to do is convince people that if they buy at the current price, they will be able to sell in the future at the same or higher price. (or at least the sale price of what they bought plus what they earned in interest will give them a profit.)

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#19

@Sentinelrv, please, stop throwing your money before the model is fixed. I can’t watch more your self-sacrifice.

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#20

Why would you want to sell the Nushares at 100 Satoshis / anything below current market price?

Why not sell them at the current market price or above?

At the moment if someone wanted to buy $1000 worth of Nushares it’d put the Poloniex price up to 200 Satoshis, and if multiple people are pledging $1000+, why build in a further price drop?

Is everyone sure that selling at 100 Satoshis is the best course of action?

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