I don’t want to get too far off topic here but would like to point out that day-trading creates volume and popularity. Two very good things for all shareholders.
Also, it seems to me that reducing expected dividend earnings by 95% would make a lot of people more inclined to day-trade rather than hold.
I tend to think custodian motions currently passed are contract signed. Shareholder can express their wishes to change the terms of an existing motion but the relevant custodian has to agree with it for it to take effect.
Would modifying the custodial fee to reflect a length of time served, like an annual salary, be more appropriate in this structure?
At 5% (or 2.5%, or 1%) it would probably be easiest to put aside the first 5% of sales and then save the rest in reserve. This would eliminate daily requirements for tracking. Or, set aside two or three blocks of payments that up to 5%.
@KTm do you generally support this motion? If so you might be the best person to raise it in final form. I think consensus is developing that the custodial terms you were elected to should be unchangeable without your consent.
I wonder why there needs consensus be developed… You can’t shouldn’t force somebody to do anything this person doesn’t like to do and in this special case that differs from what has been agreed on.
This is a contract.
That can be altered, but only if all parties of that contract - in this case the voting NuShares holders and the custodian - agree!
For sure @KTm needs to agree!
Nu can be glad to have custodians like @KTm and should never intend to breach an agreement with them. I mean, NuShares holders want custodians to stick to their part of the contract. NuShares holders need to do the same.
The rest is for the voting upon new or altered motions, grants, etc.
Totally agree. Honestly I think a bonus should be given to KTm for the extra work and care she has given as the first and major liquidity provider. Extra reward for extra dedication.
No need for this, for sure. The community’s patience has been excellent and I can ask for nothing more than that.
I support the direction that this motion goes in, but I’m still unclear about the mechanics. I’ll address my concerns in after my next comment:
This is a valid point. A contrary opinion is shareholders would also be disappointed if the Nu ecosystem took a hit because there was a “run on the bank”. Perception drives a vast amount of trading in the cryptomarkets in these early days. We’re not supporting a deep enough amount of liquidity yet to be able to absorb the damage that concerted FUD campaign could generate unless we stay as close to 100%-backed as possible.
If I were to be asked (and the shareholders agreed to my modified proposal) to move to a system like this, I would structure the dividend payments to be issued every one|two|four weeks (for an amount to still be determined; one that is healthy for the ecosystem, but not unbalancing or too small). These dividends would be made until the agreed to payout was reached.
Topics for community discussion before I can submit a new proposal:
I’ve been giving a lot of thought lately to how I can generate profits for the shareholders using the current grant. I would like to set up a trial run that would last one to two weeks. During that time period I would increase the sell/buy spread by a small amount. The profits on this spread would be tracked and at the end of the trial, the shareholders will be provided a breakdown (and full trade logs) showing what the net result was.
@jmiller and I are the only major custodians granted NBT directly running bots right now. We have LPC’s, too, and I’ve very thankful for them. What I’d like to see is a disbursement of my initial grant to a series of custodians voted on by the shareholders. It could be as simple as one or two new ones to start, each who would receive a distribution by me of (arbitrary amount to be discussed, but call it 100K NBT). They would then need to work in concert to manage the funds like I am (as a “spread-profit taker”) and support the markets.
I don’t plan on going anywhere, but it has been brought up many times on this forum that shareholders would like to see a reduction in individual custodian risk. From my understanding, multiple custodians on a single exchange pair is imminent, so we could continue to support everything that we currently are, but also protect against times that a custodian’s bots may drop offline due to technical issues.
A personal note:
My goal has always been, and continues to be, to make Nu a success. My profit will come from an increase in NSR’s value, which was accurately mentioned earlier in this thread as a by-product of successfully making markets for NBT and by generating funds to issue dividends to shareholders. While I’m not obligated to reveal what I am using (and have used) portions of the grant fee for, I’d like to give the shareholders insight into it. A portion has been used for on-going operating costs. I have bot and Nu daemon servers running on different secured hosts that allow me to place my bots in geographically advantageous locations. I also have been putting portions of the funds into play to help promote the Nu ecosystem (through tipping and other bonus payments to people working hard on the system). A significant portion hasn’t been used – mainly because any “unbacked” NBT are a minor danger to the system until it gets large enough to support it – and will last me at my current burn rate for a number of months.
My time is worth a lot, but I see giving that as a shareholder service that ultimately may benefit me as a shareholder. I see people in this community tirelessly working towards the goal of mass-adoption of Nu without asking for compensation. It energizes me to continue to do the same thing.
I consider these these are the “Dark Ages” of the Nu ecosystem…not because they are economically bad or that we’re fighting distrust or despair, but because we’re working in the “dark” without a lot of support or tools to make it easier. I’m committed to working with the community and the Nu development teams to improve this. I see the work that each and every one of you are doing and I want you to know that it will make a difference and the world will be a better place because of it.
In closing, if the community find ways to continue to be patient with me as I work through the struggles, and continues to support my efforts, we’ll get through these next couple of weeks and months. We’ll find ourselves in a place full of reports, transparency, and opportunities.
… see what happens when I travel for work and am gone from the forums for too long? I start to write massive tomes of scattered opinions.
//KTm
If you had not already considered doing so, I would recommend that you set up a separate conversation with @pennybreaker and @Chronos to get their opinions on the type of spread that could be sustained and what that would mean for peg maintenance.
I’ve acted as intermediary at times between you and @desrever regarding the withholdings functionality on the bot, but I’d also recommend that when you have a chance, that you two have a formal discussion here on the boards (or in a PM) to make sure that the bot code is configured in such a way that you can meet any future agreed-to structure.
An update on public reporting – As I noted in a different thread, once we tested the reporting tool on a live custodial setting, I identified areas where it wasn’t working correctly because the data being returned didn’t match what was expected. I’ve made significant progress refactoring those areas and have been working with the NuBot team to make updates to the way that the bot logs its actions. I don’t have an ETA yet for the final release, but it’s being worked on as quickly as possible.
In the meanwhile you may want to manually prepare a follow-up report to give shareholders insight into the operations of the grant. I apologize for the delay and the added burden that it places on you. I want to make sure that there are no issues with the data being presented because IMHO it’s better to not have the information than it is to work off of incorrect information.
I will do that.
…and do this, too.
Yes, it has been far too long without a reporting. I have obligations I must attend to right now, but I will make this a priority to have as soon as possible for the shareholders.
Thank you for your work on the reporting tool. From what you have shown me, it is shaping up very to be very powerful tool for we custodians.
//KTm
I’ve seen support for this idea from other shareholders, but I’m still against any action that reduces the quality of our product by loosening the peg. Our marketing efforts are weakened if we can’t say “Always $1.00 US” with a straight face.
I’m much more in favor of looking at how we can structure variable transaction fees to properly monetize the network without diluting our product’s competitive advantage. A 0.25% or 0.5% fee on all transactions above a certain size would achieve the same effect as a custodian trading the spread; in each scenario additional USD are raised for shareholders, except with variable transaction fees it is accomplished from the sale of new NBT as opposed to breaking a promise to existing NBT holders who thought they could sell back for a certain amount. As a side note, there’s already a product with a natural spread (BitUSD) and it’s performed horribly.
I appreciate the sentiment of the rest of your post, I’m glad you’re willing to consider variations to the original plan. I think your quote below sums up my feelings nicely:
Another idea to generate profits: I propose that Nu request a 0% fee on a single custodian account per exchange. The exchange would still receive the 0.2% from the counterparty of each trade, so their income from NuBot activity would be approximately cut in half. The savings for custodians would then be profit for the network, and the walls could remain with their current margins.
Nu custodians have generated huge trade profits for BTER and CCEDK, the latter of which has arguably seen success nearly entirely due to NuBits. This proposal is a way to share and secure that success.
While there are reasons for reservations, I am in favour of reducing or eliminating dividends paid from the grant to KTm. This change adds counterparty risk while strengthening the peg. The added counterparty risk can be minimized by implementing the changes I proposed here:
Counterparty risk can also be reduced by transferring some of KTm’s grant to other custodians as KTm has suggested, so long as the chosen custodians are as trustworthy as KTm. At a minimum, I favour transferring some of KTm’s funds to Jamie Miller.
One way to minimize risk of custodians taking these funds is to secure agreements with exchanges that funds cannot be withdrawn from the exchange account except under certain conditions.
KTm mentioned that she is considering widening the spread of the walls to bring revenue to shareholders. This is counterproductive. The cheap liquidity we have provided so far has been critical to our success, so we shouldn’t do anything that would reduce liquidity or raise the price of it. Exchange discounts for high volume trading by custodians was mentioned by Chronos. Such discounts should certainly be pursued, but rather than having the savings be revenue for shareholders it would be better to pass the savings on to people exchanging NuBits by lowering the spread between the walls. The spread should be as small as possible without permitting exchanges to drain custodial funds.
Although I can see the value of a tight pegging band in helping adoption, in the long term a wider spread is a better choice and a larger fee.
Trading spread is acquisition cost of Nubits. Everyone pays for the cost when buying one currency with another, may the cost be in the form of commissions or buy/sell spread. Buying nubits from Nu bot is acquisition.
Transaction fee between Nubit users is a different situation. It’s a persistent use tax to the user of Nubits. It’s friction in the money flow. It’s sand thrown into the gearbox of Nu economic machine.
I would rather paying a one-off acquisition fee to buy a money of very little friction than saving an initial cost but having to pay a fee every time the money changes hand. Actually in the latter case off-the-chain payment/clearing methods tailored to users need will be popular and the fee will be largely circumvented.
I think providing liquidity should come at a price eventually. But agree with Jordan to the extent that it might be counterproductive in this early stage of NuNet. I’m also not keen on increasing the transaction fee as that will indeed put friction into the money flow and would prefer a one-off acquisition fee over network transaction fees. As that is basically a service, but oddly enough also a necessity for the peg. That’s why I think we have to be careful with charging for that.
But maybe we shouldn’t be too worried about making profits with NuBits itself. If anything it should be services on top of the network provided. The real value of the network will show in NuShares, so that’s where the money is primarily to be made in my opinion.
So you are saying that the price for enjoying a stable, cheap peg from NBT buyers’ perspective should be reflected in NSR’s price and not in some fees imposed to tx?
But shouldn’t the price of a share be dependent upon the potential dividends of Nu, which implies revenues in the first place?
I think NuNet should primarily make money with the services on top of the USD pegged NuBits. Have to admit that currently the economics doesn’t fully make sense in my opinion as we only provide liquidity and a stable medium of exchange to the markets which is not very profitable, but lack of sound economics was the same with the early internet. The promise is there and we all know this is useful and that profitable services on top of this will eventuate. At this stage we have to master the technology and support further adoption. As most start-ups, focus is on investing and developing the vision. When we have established sound business models we can issue dividends to shareholders.
@Cybnate So you are seeing Nu as a venture (providing the first stable currency over the Internet) that has been funded with VC (the shareholders money) and that will become profitable after a few years, hopefully sooner. It is interesting to note that @JordanLee does not allude to any business aspect (we need to get profitable) in this white paper. I would be interested to know his opinion about that.
@cryptog Paying shareholders dividends is engrained into the system. So I’m pretty sure he and the shareholders like to become profitable rather sooner than later. It is not the -if-, but the -when- and -how- in my opinion.
@Cybnate Right. That implies also that they are confident in Peercoin’s gaining value or at least in its ability to store value.