I understand the desire for having a collateral, but that makes it more complicated and long-term more expensive.
It’s always the same: face some risk or buy insurance.
I’m fine with Nagalim holding some more funds to increase that type of buffer. FLOT multisig is just not flexible enough and only as useful as it is, because it never takes FLOT more than some hours to sign and broadcast a tx - although it would be compliant with the terms to have much slower signing activities!
Nu will come sooner or later to a situation in which Nu funds, that are used for liquidity provision, are lost for whatever reason.
That doesn’t mean it was wrong to do it that way!
Even if Nu loses some funds from time to time, it’s long-term cheaper not to buy insurance, because if Nu loses funds very often the insurance gets expensive as well!
@Nagalim, how much collateral, what type of collateral and at what annual rate could you provide?
…just to have some numbers to estimate the costs of having collateral.
The FLOT (or whatever organization), which might manage the collateral, would charge a management fee as well.