I am new but confused with NuShares

Hi there!

Recently, I have become interested in investing into NuBits and NuShares. With all the great features that Nu provides, I have found this crypto currency very interesting. I took the time to read the whitepaper a little bit, but still I am a little confused on how NuBits work, especially NuShares.

So here are my questions:

  1. If I buy some NuShares, will I be able to receive dividends automatically (by just holding the shares)?
  2. What is the difference between an address and a dividends address?
  3. Is there a minimum amount of NuShares required to be able to receive dividends?
  4. If dividends are not paid by just holding shares, then how is it done?

Sorry for asking (questions might seem too noobish) but it would be great if I could clarify my doubts about Nu. Looking forward to stay within the Nu community (and network)


Basically, the white paper is old and dividends arent really used anymore. Here, read this:

To answer your questions:

  1. Yes, but only if you own the private keys (not on exchange)
  2. Dividends are peercoin addresses linked cryptographically to your nushare address via the private key
  3. Yes, it depends on the amount of ppc being distributed, but generally 10k nsr is considered the minimum for most stuff around here. We will be changing the denomination of nsr eventually so 10k nsr = 1 nsr (i.e. divide all address balances by 10k so the accounting is easier)
  4. Dividends are paid when we want to give moeny back to shareholders. This isn’t so important right now as we’re still a growing community and want to spend most of our money on dev work and such.

Questions are great, welcome!!

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Thanks for your reply. This has cleared some of my doubts. However, I still have one more question about your post.

By stating that: “…dividends aren’t really used anymore”, does that mean that dividends will no longer be paid?

Once again, thank you for taking your time and helping me with my confusion about the Nu system. I really appreciate it. :slight_smile:

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Peercoin dividends havent been used in a year. About 9 months ago we forked to create Blockshares, which you could call a form of dividend as every nsr holder was given bks. Since then, we have been using our extra money on buybacks, wherein we buy nsr on the open market and provably burn it to reduce the supply.

Ultimately, it will probably be a while before we have another peercoin distribution as the governing shareholders have steered somewhat away from that profit model in favor of the buyback model. In my personal opinion, our creation of a peercoin multisig reserve is a good first step toward sustainable dividends, but I honestly don’t believe dividends will become a regular thing until we implement volume-dependent txn fees to emulate the % txn fees of companies like visa and mastercard. That tech is probably over a year off, however.


Blockshares sound very interesting. Would you mind sharing more info about these shares? Also, where could I buy some Blockshares? Thank you for your reply.

It’s important to point out that there is still the same amount of value being transferred to shareholders, because share buybacks and dividends are functionally equivalent in terms of value delivered to shareholders. We have successfully completed over 20 buybacks to date, each of which increased shareholders’ equity in the network.

Shareholders have chosen buybacks over dividends because of two advantages:

  1. We generate a lot of new user traffic from metric websites like coinmarketcap.com, where a higher share price is important. Share buybacks increase the price of shares, whereas dividends don’t.

  2. There are NuShares that have been lost forever, such as when an owner abandons them or the keys are lost. These NuShares would still receive dividends in our automated distribution, which would be wasted value. In comparison, share buybacks deliver value to 100% of all active shareholders.


We realized that paying out consistent dividends removes money from the entire system, money that we will eventually need once people decide to sell their NuBits back to us.

Right now when we sell newly printed NuBits, we receive Bitcoin in return. That Bitcoin is held in reserve by a multisignature group called FLOT (First Liquidity Operations Team). NuShareholders pay members of FLOT to manage this reserve on our behalf. When the buy side gets low, they use the Bitcoin in reserve to protect the peg by buying NuBits. When the sell side gets low they sell NuBits to protect the peg.

When our Bitcoin reserve has an excess amount of funds, we use some of it to buyback NuShares and burn them. By doing this we are effectively transferring the value of the Bitcoin to our NuShares.

If our Bitcoin reserve gets too low NuShare buybacks stop and we may need to institute park rates. This encourages people to buy NuBits and park them to receive some interest in the future. It also helps fill our Bitcoin reserve back up once people start buying again. Once the reserve increases to an acceptable level, park rates can be lowered again.

If however people keep selling NuBits and our Bitcoin reserve continues dropping in the face of raised park rates, then it means we need to permanently reduce the supply of NuBits in circulation. This is where the NuShare buybacks come in handy. FLOT will take some of the NuShares we granted to them and auction them off. The proceeds they receive from the auction will then be used to buyback NuBits and burn them, increasing buying pressure and permanently reducing the supply.

Dividends will hopefully be viable in the future, but not right now. If we use all the money to pay ourselves dividends, then there wouldn’t be enough in our reserve to buyback NuBits when people sell them back to us. The peg would break and the system would collapse. We need to keep that money people give us in reserve, whether it’s Bitcoin or value transferred to NuShares in the form of buybacks.

The real money maker is encouraging people to actually transact in NuBits. When people send NuBits, they are charged a transaction fee. The transaction fee is destroyed. This means every time somebody transacts in NuBits, a tiny part of the entire supply is destroyed in the process. Over time with lots of people making transactions this can add up to a lot of NuBits destroyed via fees. The NuBits destroyed will eventually need to be replaced as the supply shrinks. We would then print more and sell them back to people. So the way we’re supposed to make money is selling people NuBits, letting the transaction fee eat away the supply over time through fees and then replacing that supply by printing and selling the NuBits again. NuShareholders provide a stable crypto transaction service and we are rewarded for that service when NuBits are destroyed through fees.

One of the problems right now is that people aren’t transacting as much as we’d like them to. NuBits are instead sent to exchanges and traded with, where our fee can be avoided. In order for our fees to make any difference, transactions need to happen on the Nu blockchain and not through exchange accounts. This means we need to find more ways to increase adoption so people actually transact with them. If we are successful in increasing adoption and use of NuBits, dividends might then be safely distributed with no risk to the system. At the moment though we can’t do it without taking money out of the system and endangering the peg.

I hope this wasn’t confusing to you. Here is a resource for you to read, a history of our network that I wrote. The history only goes up to Summer of last year though, so it needs to be updated…



@Sentinelrv Thanks for sharing detailed information about NuShares. It made me understand more about shares and the rest of the Nu system. I will keep researching more about this as it looks very interesting.

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I’ve seen this mentioned by a few people, and it’s not true. We need to stop propagating this myth. Buybacks and dividends are exactly equal at transferring value to shareholders and “removing” value from the system, depending on shareholder preferences.


I have 800,000 NSR out of 800,000,000 total NSR. I own 0.1% of the network. The current market price of NSR is 0.0025 USD.

Scenario #1: Dividend of 10,000 USD occurs

At this point, I now have 800,000 NSR and 10 USD. I can either put 10 USD in my pocket (Outcome 1: taking value) or purchase 4000 NSR with the USD dividend (Outcome 2: retaining value). Outcome 1 is 800,000 NSR (exactly 0.1% ownership) and 10 USD, Outcome 2 is 804,000 NSR.

Scenario #2: Share buyback of 10,000 USD occurs

At this point, I still have 800,000 NSR. The 10,000 USD has purchased and burned 4,000,000 NSR. The new circulating supply of NSR is 796,000,000 NSR. Outcome 1 is to sell 4,000 NSR so I have 796,000 NSR (exactly 0.1% ownership) and 10 USD, Outcome 2 is 800,000 NSR.

Share buybacks and dividends are exactly equal, because it assumes a shareholder will always prefer either to have USD or a higher percentage of NSR ownership, which can occur in both scenarios. We are not somehow beating the laws of finance with buybacks over dividends.


This does make sense, especially considering the fact that the price of NuShares has dropped closer to where it began before our brief spike when buybacks first started. This proves that certain shareholders started cashing out as buybacks were ongoing, meaning that money did in fact leave the system.

I had always thought that we were trying to increase the price of NuShares for when we needed to sell them and buy back NuBits, but it appears that NuShare buybacks can also be considered as a way of taking profit by shareholders.

The main difference I see is that dividends distributed equally is guaranteed profit for all shareholders, whereas buybacks are only potential profit depending on if you decide to sell some of your shares once the buyback raises the value per share. If the majority of shareholders don’t sell then the few who do reap all the profit from the buyback, with the exception of the increased equity percentage for everyone.

So it seems that we only hold in reserve (in Bitcoin/Peercoin) a fraction of the amount of NuBits that are in circulation. Anything in excess is distributed as profit to shareholders in the form of both dividends and share buybacks. This goes with the expectation that these funds may be retained in the system or may leave and never return.

Therefore, NuShares can’t really be considered as part of the reserve after buybacks have been performed, since we don’t know for sure whether shareholders will sell or hold onto their shares. If they sell, then that value has left the network. If they retain, then that value stays in the network and can be used in case NuBit buybacks are necessary. They can’t be considered part of our reserve though, because we can’t count on shareholders retaining that value inside the network by not selling their shares. Am I understanding this correctly or am I still missing something.


I think there is a difference: the liquidity of peercoin is not the same as nushare. Say peercoin is more liquid thzn nushare. In that case you might end up with significantly less dividends in terms of usd in case you decide to sell nushares in a buyback scenario.


Open Market:

IPO price was like $4, though again NSR holders at the time got some BKS for free.

It’s still available to use and it’s a powerful tool.

Yes this is an issue which will be bigger as time goes on. I’d like to see the distribution list limited to addresses that have minted at least once in the last, say, year.

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4 posts were merged into an existing topic: Limiting dividends distribution

@Nagalim Thanks for sharing information about BlockShares. Even though there won’t be dividends for NuShares anymore, I have bought a hefty sum of them just in case. As for BlockShares, they look very promising.

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