Supportive of that, although I hope the 25m would be adequate. I would encourage Shareholders to buy Shares just now. Just see it as an additional ICO to kickstart liquidity operations and pay for the ongoing operations and developments we all voted for. And they are cheap! I just bought a few at least to compensate the dilution created by the sales. Buy low, sell high they say.
I agree that trying to store our reserves in NuShares has ultimately failed, however I am hesitant to abandon the current tier 6 right at this moment due to the fact that we still need to build our tier 4 buy side reserve back up. Bitcoin reversing course doesn’t necessarily mean that people will come back to NuBits when they see what our current situation is. If they see that we are taking the necessary steps through NSR sales to build our reserve back up, then they may be more willing to come back to NuBits if Bitcoin reverses in price.
The best time in my opinion to discontinue tier 6 may be after we build our reserve back up and we no longer need to sell NuShares. Our increased tier 4 reserve will provide a larger buffer, which means park rates won’t need to be used as much. We surely wouldn’t need to jack the rates up as high as we have them right now. At the moment though we have no tier 4 buffer, which is why parking rates need to be so high. Once that reserve gets built back up through NSR sales, then we can rely on tier 4 and parking rates more and discontinuing tier 6 would make more sense. In the present situation though we unfortunately need it.
There is also the possibility the reserve could be filled by offering other products like our presently planned pegs to the Euro, Yuan and SDR or the potential fixed supply currency, but I fear the market may reject these new products if we offered them now because of our current financial situation. Again, NuShare sales would be the only way to get us back on stable footing to the point where the market can trust us enough again to accept and purchase our new products. So once again, I think we need tier 6 right now, but later on after our reserve has been increased we can remove it. Unfortunately, it most likely means some NuShare dilution until the point comes where we don’t need it anymore.
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This is what I have been doing to support the network. I bought around 333k the other day not only to get cheap NuShares, but to help support the price in the face of the sales.
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@tomjoad, I have a question about your actual motion text here…
Are you speaking about tier 6 only in the context of defending the peg in low demand cycles as a final line of defense? What about high demand cycles? I see you wrote this below it…
Are you speaking here of minting rewards or actually using NuShare sales in a limited way other than as a last line of defense? For example, let’s say we use tier 6 in this instance to get back on track with our tier 4 reserve. After tier 4 is filled, we pass this motion to discontinue use of tier 6. Afterwards, Nu hits good times again and the NuShare price is higher than ever. During these good times, would this motion allow or prevent us from being able to sell NuShares in order to tap our higher market cap for things like filling our reserve even higher or gaining funding for other projects?
We have always sold NuShares when we’re in low demand cycles and at the bottom of our market cap, but never when it’s high where we could use it to benefit us. Does your motion prevent us from being able to do this? If not, it might be best to spell this out more clearly in the motion text.
I have heard others voice this concern as well, so I wanted to make sure it was clear.
I think this conclusion is too early. Buyback did push up share price significantly. That memory is still in many people’s mind. Knowing that there will be buyback someday encourage people to buy.
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Nagalim also said this about it…
I think it is a matter of fine tuning rather than throw Tier 6 out f the window.
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I bet you know this and refer to the end result, but parking removes NuBits from the market until unparked, which could be enough time and opportunity for the network to improve beyond the cost of interest. I haven’t understood if that’s how we can use them now, though.
Concur.
As long as NuBits keeps surviving using NuShare sales, Tier 6 should function? Or am I thinking faultily? We need to survive to prove that it works, and need investors to risk their funds until proven.
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Agree.
I tend to think auction is better than forced selling NSR on the market.
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This motion would strictly be limited to diluting NSR for the purposes of peg defense.
To your first point, if NuShares are in “good times” that means that NuBit sales are robust. This means there should be no need for NSR dilution to increase Tier 4 reserves, because the network can simply retain more of the proceeds of NBT sales.
To your second point, any NuShare dilution that isn’t accompanied by a corresponding increase in another asset will destroy our market capitalization. This should be obvious to all shareholders by now. Diluting NSR to raise funding for other projects may not impair the market cap when shareholders receive an asset in return, such as the original offer to receive BKS in exchange for NSR. I would support NSR dilution in that instance.
Smart shareholders see that we haven’t committed to making their assets scarce and valuable, and so they continue to sell. $0.001464 per NSR now.
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This is one of the most misleading statements I have ever read on this forum.
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I would encourage you to expand on this statement, as it’s not very helpful for understanding your disagreement with it.
I was thinking about asking you to elaborate on your statement, but I decided it doesn’t make much sense to ask for something that I can make up myself.
I don’t get it. NuShares can undeniably be considered lacking in scarcity because of Tier 6. Whether NuShare sales is a good idea many disagree about, and how valuable NuShares can be in either case is debatable, but I find it easier to see and more intuitive for NuShares to be more valuable without NuShare sales, assuming Nu is stable.
Is the misleading part that the cause of NuShares’ market value could be solely from Nu’s NuShare sales and not from other shareholders selling?
Selling shares is a stabilization mechanism. Of course selling shares when the system is already stable would drop the price. As would not selling shares when the system isn’t stable.
Discontinuing NuShare sales for that potential relies on Nu being able to function without them, which I assume @tomjoad believes is possible.
I do not understand how we would get US NuBits back on track without NuShare sales, or a rise in NuBit sales. Simply with Park Rates (Tier 5) to motivate NuBit sales?
Selling a limited number of NuShares in good times rather than bad times is an idea that @Sabreiib posted about a couple days ago.
I see what you’re saying, but I can think of a reason for it. Tier 4 reserves may be high because of high NuBit sales (meaning there may not be an urgent need for NSR sales), however every month we have expenses: development on the core protocol, NuDroid updates, contractor expenses, especially the high cost of liquidity provision. All these expenses are paid out in NuBits, which are not backed by Bitcoin from actual sales. Selling a limited amount of NuShares during good times may help to make up some of the money we put out to keep the network running. This would be done because final revenue through transaction fees is still too low to pay for the monthly expenses we have. I’m not talking about a lot (like $100-200k), just a limited amount which wouldn’t destroy the NuShares market cap.
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To support Nu’s main product there isn’t much choice beyond trying to sell NSR. As I said before, if we don’t allow selling NSR for peg defense then there is also no reason for buyback either. Fundamentally we need a way to earn revenue from NBT volume and also capitalize on our market influence - when times are good, of course. I asked for revenue sharing with NuLagoon but they didn’t like it; it’s not an easy job and my only hopes are on BCE.
Do companies in the real world do what I’m talking about above, issue limited amounts of new shares during good times in order to raise capital for something?
In real world,companies with much profit will buyback share at high price, then they either destroy them or reward some employee.
Some people misunderstand this behavoir, the action’s precondition is the companies have plenty of cash/profit.
In real world, there is another type of companies want to sell share HIGH and destroy debts, it’s called “debt-to-equity swap”.
Both behaviors above are smart, however,
1)buyback share @high price with bad fianance status is stupid.
2)sell share at low price for “debt-to-equity swap” is also stupid.
To sum up, buyback share if you have much profit, or sell share @ high price to destroy debts when you have tons of debts after share price lifted to high level artificially.
Nu has done one stupid thing(buyback high with bad financial status), and have to do another stupid otherwise you die.
You always find two sub reports in financial report of public companies, cash flow report and equity-liability report.
The “good” and “bad” “cash flow” status of Nu are influenced by outsides, it fluctuates, if BTC price had not risen, Nu may keep "“good” cash flow status today, but the “equity-liability” status is relative stable and easy to predict a company’s fate although some people deny to admit Nu is a company. A ORGANIZATION living without outside donate is a company, whatever you call it, DAC or DAO. It must comply the basic economics rule, IT tech can NOT change basic economics rules, even satoshi’s bitcoin comply the gold standard theory hundreds of years agao.
If you want to be rich and deserved to be rich, equip yourslves with decent financial/accounting knowledge. We are far far from Satoshi’s economics level.
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