One important way to make the peg stronger in the future is
to pass this bonus grant. It will set a precendent that those who stand
by the peg and shareholders in troubled times will be well rewarded.
With the recent surge of support for the motion to end all liquidity
operations (to 44%), it is important that greater consensus be
demonstrated for supporting our currencies, from the persective of
successfully promoting our product. All of these recipients have
demonstrated strong support for the peg, even in difficult and chaotic
times. Passing the grant will empower this value and deliver a
convincing defeat to the idea that liquidity operations should be
halted, due to the minting power it will grant to those who most
strongly support the peg. The quantity of NSR in the grant is
approxiamtely equal to 40% or NuShares currently minting. It is expected
to succeed in marginalizing the constituency that wishes to impose a
default on US-NBT holders. This in turn is expected to increase
confidence in our currencies, resulting in greater sales. It appears to
offer an ROI to shareholders, although I don’t know of any effective way
to quantify how many additional currency sales will occur due to
increased confidence in our currencies. Similarly, I don’t know how much
value it will bring by encouraging peg support in the future.
Therefore, I can’t be certain there will be an ROI.
These bonuses are also intented to motivate and retain its
recipients. Nu needs these few people to protect against peg abandonment
in the future while ensuring shareholders stay in control.
The proposed bonus recipients and amounts are as follows:
Phoenix: 110 million NSR
Jooize: 25 million NSR
Woolly_Sammoth: 10 million NSR
Henry: 5 million NSR
Cryptog: 2 million NSR
Sigmike: 15 Million NSR, as potential fast release bonus
Cryptog’s Contributions
As a member of FLOT, cryptog was regularly signing transactions to
transfer liquidity operations funds according to NuLaw. Having one
additional signer like him instead of those who completely refused to
sign transfers could have prevented the entire governance crisis.
Henry’s Contributions
Henry runs NuLagoon, which has consisted of a number of very
innovative pools and Tube. Like all of us, Henry lost a lot due to the
incompentent administration of liquidity operations of late May and
June. His business was receiving monthly revenue of about 5,000 US-NBT
from sharheolders prior to that, but the abandonment of the peg in June
halted that and threw his business into chaos, through no fault of his
own. He was unable to return BTC deposited in the pools merely because
the peg was lost. With a temporary complete loss of revenue, potentially
angry pool customers, and no practical way to operate his business,
Henry stayed professional and kept defending the peg. He did so by
continuing to cooperate and facilitate efforts to remedy the situation
responsibly. He prevented a large number of US-NBT from being sold at a
vulnerable time. Currently, he is returning funds to pool users, making
them whole. Henry speaks like a NuShare holder and defends the peg.
Woolly_Sammoth’s Contributions
Woolly_Sammoth is the main developer of NuBot, the software we use to
manage open market orders that keep the peg. It is mission critical
software. Upon learning of our plans to release Chinese NuBits and later
European NuBits, Woolly_Sammoth began developing to support it
immediately. NuBot stands ready to support multiple currencies, except
for work that cannot be completed until a Nu core client that supports
the new currencies is developed. Thank you Woolly_Sammoth for your loyal
support during a difficult time.
Jooize’s Contributions
Besides Jordan Lee, Jooize was the most vocal proponent of the
reliable liquidity model architected by Jordan Lee and embraced by
shareholders in numerous passed motions. As incompetent decentralized
liquidity providers were improvising in June and impulsively following
their strong bear market emotions to doom, Jooize was steady under
pressure. As a BTC and NSR FLOT signer, he always signed transfers that
were consistent with the shareholder approved model to protect the value
of NuBits. If one more FLOT signer would have done the same, we could
have saved approximately 800 million NSR. Such steadiness and fidelity
to NuLaw are phenominally precious to our network.
It is important we place Jooize as a decision maker so the network
can benefit from his steady adherance to NuLaw and fair practice when
difficult events occur in the future. That is why I would like to
promote him to a new position within Liquidity Operations: Vice Chief of
Liquidity Operations. Essentially, the Vice Chief of Liquidity
Operations has authority to determine very short term liquidity
operations actions when the Chief of Liquidity Operations is
unavailable. I expect the Vice Chief to exercize his authority for a
number of hours when he notices sudden market events before the Chief
does, such as an NSR spike or a huge NuBit sale. The Vice Chief has the
authority to respond decisively to market events in the absence of the
Chief.
After I became Chief of Liquidity Operations, Jooize performed most
open market operations on Poloniex and administered weekly auctions. He
has been perfectly consistent in performing his daily responsibilities
within liquidity operations. Jooize did more to restore the peg than any
one besides myself. He did most of the operations within liquidity
operations. He should be rewarded and retained.
Phoenix’s Contributions
Since my appearance on June 12th, there were 11 custodial grants
proposed and passed. Nine were mine. Shareholders chose to use me to
handle their assets, almost exclusively, since early July. Of the eight
motions proposed and passed since my appearance, seven were authored by
me. The network was still welcoming the participation of others, but the
vast majority of the participation shareholders found useful was my
own. Since the governance crisis occured, shareholders found only my
vision for how to proceed worth implementing.
Here is a list of the passed motions authored by me:
f8b9e060dc73a97fd28a62ecfdd419114892787a
Cap on NuBit money supply
[Passed] Temporarily cap NBT supply with full reserve
57ee6c5da13b0c91ca05a4f32e1a7bf9b44811b4
Elect Phoenix Chief of Liquidity Operations
[Passed] Create Chief of Liquidity Operations Position
1118f2334d0ef45676b38ebe2daaf30a8a345a7f
100% Reserve Required for NuBits
[Passed] Temporarily cap NBT supply with full reserve
faafd2dea7c11fc27155118469140c0b0dd66eb3
A Report on Peg Abandonment and How to Proceed From Here
[Passed] A Report on Peg Abandonment and How to Proceed From Here
318410e7d808570f8a6d7389dee796234135aef8
Make NSR Buyback and Sales Requirements a Guideline
[Passed] Make NSR Buyback and Sales Requirements a Guideline
94c2541e909b1240ac478571305809cd23295a21
B&C Exchange should trade all US-NBT for NSR
[Passed] B&C Exchange should trade all US-NBT for NSR
02258be1eb01b220b96e945b4d26f8af28fb2f1d
NuBit reserve policy
[Voting] NuBit reserve policy
I have pushed the shareholder initiative to release Chinese NuBits,
European NuBits and SDR NuBits forward quite a bit. I made changes to
liquidity operations to make it affordable and feasible to provide
liquidity for these currencies. I coordinated and paid for NuBot changes
made by woolly-sammoth. I negotiated terms of involvement with sigmike
in the effort and facilitated his proposal to provide development
services for the multi-currency release. This is a major initiative
moving successfully toward completion that has tremendous potential to
increase the NuShare market cap.
When I began campaigning to become Chief of Liquidity Operations,
US-NBT was selling for around $0.20. The NuShare market cap was down
about 85%. Most forum participants were saying everything had changed,
and that the peg was a thing of the past. There was a high degree of
consensus (among forum participants, but not shareholders) to entirely
leave the currency business, in the form of stopping all liquidity
operations, until some magical time in the future when a magical formula
to acquire even more revenue than had already been identified was put
forward by some unknown person. The situation was very dire and the
social mood very poor. Nearly the only voices that stood against the
unofficial permanent abandonment of NuBits were those of Jooize and my
own. Nearly everyone involved in the project was against the peg once
fear set in, even as shareholders continued to vigourously support the
peg with their votes. It was a surprising and disappointing reality, but
one where Jooize and I were incredibly valuable to shareholders. We
should be incentivized to stay around to protect shareholder interests
in the future.
Most people are emotionally driven to be poor traders: it feels good
to buy high and produces a sense of relief to sell low. We found that
most community members were similarly betrayed by their own emotions,
which inclined them to do precisely those actions that would produce
large losses. Though I have the same emotions, I did an outstanding job
of maintaining consistent policy throughout the crisis. Much discretion
needed to be exercised to react to changing market conditions, and I
exercised that discretion in a very rational and calculated manner on a
consistent basis. I didn’t ask for a protocol change. I didn’t negotiate
haircuts. I didn’t change anything about our basic contract with
customers. I continued to maintain that all that was needed was to
follow the carefully laid plans approved by shareholders. I followed
those plans and it worked. I provided continuity for the network.
Despite the high degree of discontent due to all the losses imposed
by the failure of FLOT and the hostile environment I was working in, I
was able to convince shareholders to do what they hate most: increase
the NuShare supply. I used the granted NuShares to support the US NuBit
price on a daily basis while permiting it to float. I had zero reserve,
because shareholders lost control of the reserve. I was able to raise
about $300,000 in my first 60 days as Chief of Liquidity Operations from
the sale of NuShares. With a market cap hovering around $400,000, this
was about 75% of the market cap. This was a remarkable demonstration of
our network’s capacity to support NuBit pricing even during sharp
contractions in NuBit demand.
Pegging requires a stable price, which we didn’t have. Therefore,
NuBits became a supported floating currency with a plan to transition
back to firm pegging. Each day a significant sum of US-NBT was purchased
in the open market and destroyed, steadily reducing the supply of
US-NBT, even as the NSR supply expanded. While still technically still
in transition from floating supported currency to firmly pegged
currency, the $1.00 US-NBT price has been maintained continuously since
September 13th. It is an accomplishment most forum participants were
saying was not possible three months ago.
Sigmike
The allotment for sigmike is different than all the others. The 15
million NSR won’t be given to him shortly after the grant is passed, as
will be the case with all others receiving a bonus allotment. Rather,
sigmike’s allotment will serve as a performance bonus for quickly
deploying a version of the Nu reference client that supports multiple
currencies. Specifically, if the release is posted to the nubits.com
website (Linux and Windows versions) within 14 days of when he received
payment from shareholders officially authorizing payment for his work,
he will receive the entire 15 million NSR bonus. Each additional day,
the collectable bonus declines by 500,000. This means after 44 days no
bonus will be offered. Sigmike’s grant was passed on October 13, so the
bonus will begin to decline on October 27. Unused NSR in sigmike’s
allotment will be burned.
