Here are some basic gaming techniques:
General NSR market manipulation
Get the NSR price on the open market to be irrationally low, then buy the cheap NSR at auction. The way that Nu can fight this is by voting for a NBT seed when the NSR market is irrationally low. Invert for irrationally high.
Peg Breaking
Break the peg by irrationally selling NBT. This will force an NSR seed. However, the attacker no longer has the NBT to take advantage of the auction, so this attack fails.
Complete Nu Divestment and Reinvestment
Sell all NBT and NSR, break the peg and cause a black swan event. Pick up the pieces afterward and get tons of cheap NSR. This attack is independent of the auction and in fact is easier without the auction. Without the auction, just breaking the peg is enough to cause a black swan, as there is no good way to recover it. With the auction, breaking the peg will cause a high auction price and feedback loops will work against blackswan to spin down the number of NBT in the system without dropping the NSR price too much. As the attacker buys back the NBT and NSR, the system will spin back up again and the attacker will most likely walk away with a wash, minus all transaction fees.
Auction Manipulation
Of course, we are always susceptible to a 51% centralization attack on our democratic process. In this case, an individual would gain control over Nu and could manipulate the seed to always benefit them. However, even in this extreme case, because the auction is public the entire market would benefit from this manipulation at the cost of Nu. As this āattackerā basically own Nu, they are only attacking themselves at the benefit of random traders, so they will not follow through with this attack.
Basically, the only sure-fire āattackā is to properly hedge NSR with legitimate auction bids. This will incentivize use of NBT and NSR as trading units, and contribute to our overall health.
