With the auctions underway, it is getting more important to get into actions. The actions I’m proposing are not unique and have been proposed by other in some way or the other so I’m not taking credit for them.
My proposal will certainly move some dust around the place but I believe this is a chance to get things restarted while we continue to think and start building profitable solutions. This is not a quick fix, it will take time and it will only for those in for the long haul or those seeing opportunities to create profits in the shorter term (e.g. through B&C).
With limited resources we will have to think big, but act small and built from there. My idea is to start establishing a first notion of a peg on the only fiat pair we currently have. This can be with a NuBot or Pybot gateway depending on which one can be made ready quicker. This will be a full peg of $1 with no more then a balanced 3% spread in total (1.5% on either side) to start with. Any trading on this pair will be a profit for Nu while still making a statement on the peg even though the spread initially is a bit high. The objective is to maintain parametric orderbooks with small amounts on an even tighter peg and larger amounts up to the 3% spread. The LP could be paid from the spread to make the liquidity provisioning sustainable. As part of the contract they should maintain a spreadsheet with all sales and profits on behalf of Nu at least on a monthly bases (initially more often to monitor our baby steps).
The chances that this will be overrun by traders dumping are relatively slim as fiat has a lot of friction, so only a limited amount of people will run at it as the only way out is through USD withdrawal. To reduce the risks even further:
- the liquidity provided should be no more that 10k and
- be backed by 100% reserves to provide the amount of confidence we need.
- only start until we have successfully completed at least three auctions rounds with at least another 60k NBT (US$20k against current rates) and with that removing further sell pressure from the markets. The auction may need to be ramped up for that.
When the previous steps prove successful for say 3 months, we can expand to other exchanges providing fiat pairs and/or create fiat gateway ourselves and pay LPs from the spreads as long as the spreads provide some amount of profit. Or a deal can be made on decentralised exchange (e.g. B&C or Openledger through CCEDK) where some profit sharing is possible and a NBT/BTC pair can be carefully introduced appreciating the volatility of BTC. For the first 3 months 100% reserves should be maintained and only excess funds can be used for further developments.
One of the first developments I suggest is a way to vote for the NSR/NBT price in the blockchain or continue to use the auction system as is in place right now. Any future NBT creation can only occur when the equivalent of NSR are created and auctioned off say every month by something like FLOT. This to keep the checks and balances right and prevent shareholders from going on spending sprees without obtaining the required investments and balance the books.
I don’t want to set further detailed steps too far into the future as we need to remain agile and being able to respond to new developments which may occur. I offer to run NuBot or PyBot on fiat pair on SouthXchange without any fees for the first three months. I might need some support though to withdraw the USD and convert them back to BTC, ETH, LTC or PPC reserves for Nu. There are only a few aliases/people I would trust with this. This will need to be discussed further.
It is not without risks (bank run), not without controversy (wider peg) and not certain that any trades will occur.
But it is a PLAN calling for action through babysteps for those who believe it could work and believe like me that it would help keeping momentum over doing nothing.
Please vote with likes if you think you would support this proposal. When I receive 10 likes or more I will work on it and tailor it further towards a motion to submit for voting.