Fractional reserve security on the Exchanges!

The Plaza
#1

After the Great news about Nubits daily trading volume and the short listing of Nubits on Shapeshift.io, i thought what if the fractional reserve is substituted by a complete reserve to ensure the Nu sustainability and creditability, while charging Nubits users a transaction fee with various ratios according to the transaction value, as the network revenue, and may be exclude the transactions below 1NBT or so, this theoretically will increase the network revenue as the Nubits trading volume increases due to the increasing adoption rate and market arbitrage, but i was only concerned about the reserve security on the centralized exchanges.

So what about the fractional reserve ? how secure is it on those exchanges and how can the network deal with any loss due to exchange hacking/closing or governmental seizure ?

2 Likes
#2

Hi Raythma, welcome to our forum.

Our shareholders hold several viewpoints about this topic. I can’t speak for everyone, but my thoughts on

and

are outlined in the second half of my post here: **Draft** motion for currency burning

#3

Thanks for the welcoming reply @tomjoad , i like your ideas there and i wish -as a share holder- that this approach -and @Sabreiib 's also- have a further discussions, may be new data like the daily trading volume and using patterns will help us have a solid models and Feasibility Studies rather than plain assumptions.

#4

Hi Raythma, do you have suggestion on how to earn profit for Nu network?

#5

I think that Nu network has to find a diverse income to eliminate the need to the fractional reserve, your suggestions about the short term lending and the price spread are great examples and i wish to see this community discussing and experimenting more new ideas.

I see Nubits as a great service, so i suggest to substitute the destroyed 0.01NBT fee per transaction, by a various relative fees according to the transaction volume, i.e :

0% <= 1NBT
0.05% <= 1000NBT
0.1% > 1000NBT

If we notice the Daily trading volume and compare it to the total Nubits sold until the moment, i can argue that the revenue can be significant.

If Nubit succeeded being a stable and sustainable currency, the trading volume will be doubled by many folds, so why to sell the currency once and compromise the system with the fractional reserve, if we can have a share from every transaction in the new economy that Nubits facilitate? Especially that Nushares holders are minting all these transactions !

#6

1)if transaction fee is zero, the spams attack will definitely come.
2)those destroyed transactio fee is already our profit because we don’t need to prepare corresponding buy wall.
3)high frequency micro transaction should be performed by central or semi central solution(open transaction). Imo, blockchain is not suitable for this.

#7
  1. it doesn’t have to be exactly as i mentioned, it was an example, may be it could be like this:

fixed 0.01NBT <= 1NBT
0.05% <= 1000NBT
0.1% > 1000NBT

  1. How many NBT have been destroyed since the launch of NU, 1500 NBT may be? in the case of total reserve, there will be no need to destroy them rather than selling them again for PPC to fulfill some of the market demand before issuing new liquidity.

  2. I didn’t mentioned micro transactions, arbitrage trade and later the integration of Nubits in Shapeshift.io and similar services will increase the daily trading volume rapidly and i like to see the Nushares holders having some profit for minting those transactions, that said, i think that OT is a threat for this approach if the transaction relative fees can’t be charged on the central service as well as the blockchain.

#8

We may use OT to build up our Nuexchange. :slight_smile:

1 Like
#9

I wish to see a Nuexchange -may be with no registration required- so the Nu network can focus its efforts to support the peg in one place available for everybody, and reduce the fiat reserve security risks, then we can easily concentrate on the profit options beyond selling the liquidity.