[Discussion] Tether FLOT Reserve

As far as I can tell, tether has multisig and everything. It really wouldn’t be hard for us to buy some tether and just hold it like a NuSafe proposal. By taking on all risk directly, shareholders would really only have to pay the FLOT members, and a very low-maintenance executor contract (like 2 actions a year). Is tether even a direct competitor anyway?


I wouldn’t say “direct” since it is centralized. But then again, i believe in co-operation :wink:
The problem is: how trustfull can be, longterm.

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If bitfinex falls, Tether falls…

Yes, there are issues. But if poloniex falls, we lose nulagoon, alp, and gateway funds. Is trusting like $10k to bitfinex surviving that bad? We can always pull if we sniff trouble. How about $20k? And so on, there’s an optimal number there somewhere.

So I want to make a definitive distinction between two types of FLOT reserves: Dynamic and Stable.

Price-volatile coins, your btc and your ppc and what have you, are dynamic and require either extreme over-collateralization or constant market involvement. This is in fact desireable for our core reserve (btc) because we are actively involved in the market with it anyway.

Price-stable mechanisms (NuSafe, tether, bitusd, etc) allow for extremely little market involvement. By doing so they drastically lower the costs, but show all the issues inherent in their individual protocols.

I would like to change the terms of NuSafe and all future price-stable mechisms from replacing part of BTC’s 15% to reducing the outstanding supply of US-NBT (the currency the reserve is stable with respect to) by the amount in the reserve. This is a profound change, and it would reflect a basic fact: NSR is a dynamic reserve. Therefore, the buyback would go like this:
Take all nbt supply, subtract known nbt reserve balances, subtract stable reserves, multiply by 0.15, subtract calculated FLOT btc holdings. A very negative number means we have buybacks and fill alt reserves.

As an extreme example, imagine we have 100% in stable reserves. It would lead to a steady state where all nbt debt is reduced to zero. If we were very successful we could even conceivably achieve this while still maintaining dynamic reserves, especially once we have volume-based txn fees. Then, the only debt we would have to absorb ourselves would be the case where collateral fails or a company defaults. Of course, in this case any dynamic reserve would immediately overflow and we would start buying back nsr. We’d have to come up with a new paradigm of how to spend our money in that fabulous world.

Oh, no argument. I am OK with adding Tether.

Sure bitUSD, ripple fiats … make a basket and use it as reserve. Now Nubits is backed by all competitors’ stableness and has the best liquidity. Keep your friends close and your enemy closer.

oh you can also sell the basket as the first stable coin ETF on an exchange. @ronny

USD issued by bitstamp is good for used too

Is it a crypto ? If not you can’t use multisig.


Without multisig it devolves into a nusafe option, where the manager will probably diversify amongst different exchange’s usd.

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I think we are talking here about collateral-free reserves that need only an operator.
I wish paypal could have multisig accounts :wink:

same as PerfectMoney USD, OKpay USD … there are a lot of ecurrencies. Without multisig you might as well use paypal or a bank.

Right, which @dhume could be planning on doing for all we know.

If tether works as advertised and supports multisig this could be a great addition to our T4 diversification efforts.

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other things: Is Tether change to BTC smoothly with the price feed?

As far as I can tell, an executor with a bitfinex account can just deposit and sell btc for usd, withdraw as tether, and do the reverse later when we want the money again, all without fees (except trading fee).

I don’t like the centralized design of Tether, but I appreciate the price stability it offers compared to Bitcoin.
From a diversification perspective USDT is very valuable for the basket of T4 reserves.

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I support the use of Tether as a limited part of our diversified T4 portfolio.

I agree Tether should be used, diversification is key.

We need an executor. I refuse to be executor and cannot draft a motion without one.

The zero risk (for NU) procedure i am thinking goes like this:

  1. Executor and NU (FLOT) agreed upon a value of BTC --> Tether
  2. Executor sends his/her BTC funds to bitfinex and buys Tether
  3. Executor sends Tether to a FLOT’s multisig tether wallet
    and FLOT sends to executor the agreed BTC amount.
  4. All are happy :smile: (executor could ask for a small fee)

Tether --> BTC

  1. Executor and FLOT agreed upon the desired Tether --> BTC amount
  2. Executor sends the agreed BTC to FLOT’ multisig BTC wallet and
    FLOT sends executor the amount of Tether
  3. Executor sends Tether to bitfinex and buys BTC
  4. All happy again (executor could ask for a small fee)

executors can be different in above procedures.