I believe strongly in the Nu network and in the prospects that it has to change the financial landscape for millions of people. Tempering this optimism is the knowledge that any missteps now, while the network is small, will have potentially catastrophic outcomes.
The community has engaged in and continues to have many excellent conversations about how best to grow and protect the network. A lot of those have focused on the ability for the network to scale appropriately and what to do with profits generated from the sale of NBT in the form of dividends.
I’ve struggled with the situation that I find myself in as an elected custodian. The proposal that I drafted, and that was passed by the Nu Shareholders was flawed in it’s conditions and execution of dividends. With the information that we have now about the state of the network that we find ourselves in and of the dynamics of the markets that we operate on, I believe it to be irresponsible to blindly go forward with the sales-based dividend distribution structure.
I am not, however, suggesting that shareholders not be paid out dividends on the full amount that was granted to me – on the contrary, I’d like nothing better than to be able to fully meet the agreement. What I’d like to do, however, is propose a modification to the structure that is weighted towards protecting the network and allowing it the liquidity to develop and scale out.
Please review my draft motion and let me know if what I’ve introduced meets the needs of the Nu network’s NBT users and of the NSR holders. If the feedback is good, I’ll be able to quickly formalize this motion and put it to vote – if there are many questions, I’ll work with the community to mold the motion content to best fit.
Thank you for the consideration and your on-going support.
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The successful passage of this motion will alter the contract between the custodian of Grant B7mmVdVQ1SNNcT9zuQRK1B3Cbvo8vHeoB1 (“Grant KTM” - 1,800,000 NBT + fees) and the Nu Shareholders regarding how dividends on the sale of granted NBT will be paid out.
The proposed structure of dividend payouts will adjust from the current “period sales goal” system of variable length and fixed percentage, to that of a monthly, fixed percentage system based on the total amount of buy-side liquidity available to the Nu network.
Rationale for Proposal
Many assumptions were made when Grant KTM was initially introduced by Kiara Tamm and passed by the Nu Shareholders. Two important assumptions turned out to be incorrect:
The belief that in addition to Grant KTM, the Nu network would have access to a significant amount of liquidity from LPCs. This additional buy-side support would be a backstop that would allow the payment of dividends to shareholders on the schedule as proposed;
That the main market that Grant KTM would be operating on would be NBT/USD, rather than various NBT/crypto markets.
The inability to forecast those two conditions has made it both difficult and dangerous for Grant KTM to be operated in accordance with all of the conditions of the original proposal. This motion is an attempt to course-correct the grant’s operations and provide shareholders with their expected dividends, in full, while simultaneously attempting to continue to stabilize the Nu liquidity pool as the network grows.
Like any successful venture, growing the business is the surest way to support the distribution of profits to shareholders. Simplifying the dividend distribution process and making it predictable to all shareholders provides an improvement to a system that has proven to be extremely variable and needlessly complex and difficult to manage.
By tying dividend distributions to the size and success of the Nu network rather than to the previous schedule, it is the intent of this proposal to gracefully and appropriately compensate shareholders for the expansion of the network. At the same time, should there be slow or stagnant growth, the custodian is able to protecting the Nu network’s NBT holders’ interests by making sure that a steady supply of buy-side liquidity is available for NBT repurchase and that it isn’t dangerously reduced by contractually obligated dividend distribution schedules.
Adjusted Operation Details
If passed, the dividend payout schedule previously approved will be modified as such:
- The “Period 001” dividend’s remainder (20,000 NBT of PPC) will be paid immediately to satisfy the previously voted on motion. The completion of this distribution will satisfy the original “Period 001” dividend target of 70,000 NBT. Once this has been paid, “Period 001” will be the last of “sales goal”-based dividend cycles.
- Moving forward, the custodian will pay dividends every thirty (30) days, with the first distribution to commence on [date and time to be determined].
- The amount of the dividend to be paid out will be proportionate to [ex. 5%, final TBD] of the average amount of liquidity available to the Nu network on the buy-side during the thirty (30) days preceding the date of the distribution.
- Dividends will be distributed to shares held as of 00:01 GMT on the day of the distribution.
- Should the calculated amount of dividend distribution exceed the available amount of buy-side liquidity that Grant KTM controls, sell-side NBT will be used to purchase the remainder from other Nu custodian’s buy-side holdings at the then-established market rate.
- Once the funds held by Grant KTM have been exhausted through dividend distributions the operations will be considered concluded and a post-operations report will be prepared for the Nu Shareholder.
Example Period Dividends
Time Period: 15-JAN to 14-FEB
Avg. Buy-side Liquidity: 180,000 NBT
Dividend (at 5%): 9,000 NBT
Time Period: 14-FEB to 16-MAR
Avg. Buy-side Liquidity: 291,000 NBT
Dividend (at 5%): 14,550 NBT
Time Period: 16-MAR to 15-APR
Avg. Buy-side Liquidity: 400,000 NBT
Dividend (at 5%): 20,000 NBT
Time Period: 15-APR to 15-MAY
Avg. Buy-side Liquidity: 700,000 NBT
Dividend (at 5%): 35,000 NBT
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