[Discussion] Nusafe - Hedging 50k tier 4 funds in USD

NuShares Motions
#123

Ok, now we are getting somewhere. So the problem after all is that our current way of re-balancing liquidity can pose risks to DR collateral.

That is an argument I agree with, and why I proposed a demand based liquidity formula while our discussion.

I will continue the discussion on the DR topic, since NuSafe risk comparison is finished now.

Getting back to NuSafe, I really didn’t like that this puts you in a almost (exchange can default @Dhume) win-win situation if BKS price does not meet everyone expectations.

I am not saying that It will actually happen, or that you will default Nu on purpose, but I am not comfortable with a single person having that big of a responsibility/opportunity.

In the event of BKS going down half to 3$, (even if it is successful as a exchange, but other issue arise) which chances are real, as no one can predict the market, you will literally have the option to fail Nu for 7200$.

It is not that “much” money anyway, but It could explain to some degree why are you taking a exchange risk that we have the only option to see as “suicidal”.

#124

I understand your sentiment BKS could still completely fail and lose considerable value, thus enabling the scenario you describe. Not that I personally would go for such an action, but Nu shouldn’t trust me or anyone else solely on their word.
However, would you not agree that it’s unlikely that such a change to BKS value happens overnight? If BKS price starts dropping considerably let’s say from roughly 6 to 4.50 I would advise Nushareholders to considering terminating Nusafe, I personally would prefer this as well. Or at the very least in light of the devaluation of the collateral request additional collateral or a reduction in the hedged amount.

#125

That is reasonable.

#126

Seeing as there, are no more votes being cast in my poll and @Nagalim suggesting 30k with 7.5k BKS for a lower fee I’m going to update my draft with his suggestion. I will repost and link to this topic, so that shareholders are not overwhelmed by all the discussion in this topic for which a lot of it is about DR instead of Nusafe. I will change this topic to discussion instead of draft.

#127

I don’t agree. Both Nu and B&C are based on technology of Peercoin, which has been out of sync with the lasted bug fixes of bitcoin. Not many weeks ago PPC experienced a fork. It was @sigmike and several other devs’ (@mably @glv… ) quick action, coupled with the fortunately fact that the exploit was already understood and the exploiter didn’t use it to double spend on high profile major exchanges, that saved Peercoin (and Nu and B&C) from further damage. Similar event could happen again. Fixes may not emerge so quickly next time. FUD would be waiting at the corner. Value of your collaterals in BKS and NSR are highly correlated in this regard, and can drop greatly over night.

#128

To a certain extend the same can be said for bitcoin, an overload of transactions causing the network to jam, something huge like Huobi defaulting, a major continent banning bitcoin and bitcoin businesses, etcetc.

If you believe this risk to be very likely to occur then I would advise you to not vote for Nusafe, I’m afraid I cannot alter the proposal in a way to 100% avoid the collateral devaluation risk. There is a risk of being in BTC there is a risk of BKS/PPC/NSR/LTC/DOGE etcetc. I think he best strategy is diversification. I would love to see some similar proposals like Nusafe but with different collateral units.

Also I urge a shareholder to research Tether, that might be a great addition or even replacement of Nusafe.

#129

I don’t believe the odd is high (once a year i guess).

I agree with you that any other cryptocurrency has similar problems. What I want to point out is that B&C and Nu are correlated so using BKS as collateral against Nu’s valuation is not the same as using say BTC.