DR - Distributed reserves

NuShares Grants
#9

Wow, that’s a pretty amazing idea. I’m interested in hearing what others think about this and if they can poke holes in it.

In the bolded part you are referring to a custodial grant correct? If so, I wonder how much stress that would put on shareholders if they have to keep track of all the grants they have to put out. Is there maybe a way to simplify it for shareholders, like having a group like FLOT managing things and giving out the NuBits to those who are owed them? Shareholders would make a larger grant to FLOT instead of making lots of smaller individual grants.

#10

I have been thinking about this, it is beginning to be really difficult to keep track of Nu. We need a calendar, and a bookkeeper. If anyone wants to contribute to Nu without coding skills or more money please PM me, I have a few ideas.

We can pass a motion with the general rules, and FLOT will be free to use T4 to repay debts.

Time will tell how much FLOT needs.

#11

Good idea. Can @CoinGame or @tomjoad split this off into its own thread?

It’s your idea, so what title would you like them to use?

#12

Distributed funds management maybe?

I haven’t thought about that, I am open to suggestions.

#13

Maybe…

“Creating a Distributed Non-Volatile Reserve Using Interest”

…or something similar

#14

BitUSD is a broken product that is unlikely to ever gain widespread usage. I don’t understand why we would want any exposure to it. Integrating a weaker product into our network would give that competing network legitimacy, which is counter to NuShareholder interests.

This shows that the custodian has a powerful financial interest to ruin the NuBits peg through speculative attack. Benjamin wrote about the possibility of speculative attacks on a much larger scale here: Speculative Attack on Nubits

If I owe the Nu network 10,000 NBT and don’t own NuShares, I will do everything in my power to devalue NBT prior to paying back my loan. This could include negative PR campaigns, hacking our website, or performing a speculative attack. We should not give custodians incentive to harm our network.

Our T4 reserves could be better-diversified through investment in other cryptoassets like LTC, PPC, ETH, etc., but pure BTC in a multi-sig fund is still desirable to paying one person to hold USD in my opinion.

1 Like
#15

That premise is true for every 10,000 NBT potential buyer. Is not related to the method itself.
You owe USD value, you can also buy and burn NSR, pay in BTC, NSR, LTC, PPC, ETH, etc. Basically whatever FLOT is willing to take. Burned is preferred to a payment to FLOT, but we can do both.

They already have the incentive when they have their hands full of buy side liquidity

I think you didn’t understood what this method proposes, and the risk of paying “one” person with this method (ideally they would be a few).
That person/s already paid his debt, and then some as a collateral. Nu have all the money.

#16

So lending Nubits is out of the question for Nu network?

#17

You will have a hell of a time explaining to the tax authority that buying NBT to burn and cashing USD out is connected.

Anyway it’s an interesting idea to do two things together 1) get rid of volatility risk of BTCs in T4 and 2) have a decentrralised mechanism to buy NBT to burn.

1 Like
#18

You don’t need to go into details, how is this different than putting in money in the exchange and taking out BTC, then putting in BTC and taking out money? That is basically what you are doing, but in a complex way.

You also don’t explain ShapeShift transfers, I bet they are equally complex under the hood.

#19

The onus is on you to explain that complex thing to tax offcial who may well be totally ignorant about cryptocurrencies.

Because the exchanges and shapeshift with their interfaces shield the complexity for you as a user. You don’t have the benefit if you roll your own.

#20

That way I not only 10 kUSD value for Nu, but lend Nu 1 kUSD.
It would be very convenient to do that on a NBT/USD pair to reduce the complex buying and burning NBT, receiving BTC, trading them, etc. solution to:

  • create a smart contract with Nu
  • buy 1 kNBT at an exchange, send it to FLOT T4 sell side address
  • receive 1 kNBT + interest back later

Not so different from parking after all, but more complex…

I agree that bitUSD is much less adopted than NBT. I don’t know whether I’d call it a broken product. One could say that BTC is a broken product as well and that’s the reason why we need to search for alternatives.
BTC has a huge market depth, but no stability.
bitUSD has little volume, but a better stability than BTC (hopefully! without volume hard to assess that).

I fear that one can’t be argued with - at least I don’t know how.

I think lending and leveraged trading will be very important once B&C Exchange is operational.
Isn’t this proposal paving the ground for it?

#21

Just a reminder to @JordanLee and @NSRBuyback that the T4 threshold motion passed. That means the buyback velocity will most likely decrease this weekend. I’m guessing due to a number of factors next week’s buyback will be ~$15k instead of this week’s 20.

Except the btc price went up last night, so all bets are off. We could easily have more next week than we had this week.

1 Like
#22

But we don’t want NBT in the pockets of FLOT, we can grant them if needed, what we need is USD reserves for buy side, something we don’t have right now. I mean USD = NBT, right, but as a reserve they are not the same thing.

Also that simplified version you proposed does not have collateral, and the T4 reserve is still in BTC, not in the burned NBT.

Edit: I see USD as an asset, and NBT as a liability

#23

I tried to say something to this effect when I asked for a T4 buy side that matched the T4 sell side. However, I think it’s important to realize that holding USD is a big liability compared to burning NSR or distributing PPC, possibly even compared to holding BTC. Fiat can get seized.

It’s only a liability if we are obligated to refill it.

2 Likes
#24

Looks like I removed the marrow of you proposal by my (overly) simplifying it :wink:

#25

Are we still going to get this side discussion moved to its own thread? It would be great to have some brand new eyes on it. I’d move it myself, but unfortunately I don’t have any mod powers in the Nu forum like at Peercointalk.

1 Like
#26

@ttutdxh, you have your own thread now for your idea.

#27

i think this way can avoid the move price of BTC very well

#28

Thanks @CoinGame for splitting the topic.

I have added a title, lets hope it clears things up a bit.

Let’s continue with the discussion, any new comments on this?
I find that the model is difficult to explain, what would you change about it?

A lot of discussion have taken place in @Dhume NuSafe proposal about what I think are two very similar methods, what do you guys think?