Leakage detection

[Sabreiib]

In future, if we develope an anti-inlfation currency, the protocol still need shareholder’s help to perceive the variable inflation rate in real world.

eidt: The merit of Nu system is that we interact with the real world, while bitcoin is ostrichism regardless real world demand&supply situation. IMHO, bitcoin is just an electronic toy from IT industry, if there is a successful crypto currency in future, it must fit a sound economics theory. Gold is a failure being a good money in human being’s several thundreds real world, any cryptos simulating gold (PPC,XPM) has no future as a currency, they can only be asset.

Bitcoin, from economists view, is ridiculous due to its neglect to real world demand&supply, and doomed to be very deflation, an evil, a costly asset, that’s all, never will be a good currency.

[Chronos]

In future, if we develope an anti-inflation currency, the protocol still need shareholder’s help to perceive the variable inflation rate in real world.

Here’s a thought: NuBits’ core currency, NBT, can be made inflation-protected by having shareholders set the 1-month parking rate to the previous month’s USD inflation rate. Those who wish to protect their NBT from inflation can re-park each month.

[mhps]

Trouble is the asset backing up NBT (i.e. USD) is inflatory. Offering more interest must be balanced by a destroying mechanism to cancel it out. Well I think the mechanism will naturally be NuShares losing value, so that the value of the whole Nunet is precisely the value of asset (USD plus some
adjustment of earning prospect) it ihas.
If we somehow back NuNet with a basket of commodities, then we can issue more NBT (which is pegged to USD) according to CPI.

[Chronos]

Offering more interest must be balanced by a destroying mechanism to cancel it out.

Not necessarily. In a perfect world, demand can be measured by “stable value of NBT” instead of “total number of NBT” which means that demand keeps pace with supply growth, both at the rate of inflation. In the real world, of course, NBT demand fluctuates…

…on the other hand, I can see the flip side of the argument – the parking rewards are unbacked, so a NBT-burn mechanism is needed. I agree.

[Sabreiib]

@chronos, that’s an excelelnt idea! And we must ensure nu’s profit model to support anti-inflation. My several suggestion:

1. Add encryped message function and charge fee
2. Charge transaction fee on buy/sell wall
3. Build up Nu exchange with open transaction to charge tansaction fee.

Leakage is bad, profit is good, not off topic.

[Sabreiib]

I think shareholders can vote a NSR/NBT ratio, such as pledge 1000NSR to borrow 1NBT.

Shareholders will reference NSR price on market and the supply/demand situation of NBT. If NBT supply too high, we “close the valve” by voting 1500NSR to borrow 1 NBT. In this way the protocol may handle it easily.

[Chronos]

@Sabreiib This is a fascinating idea, but how does it fit into dividend distribution? If a custodian wishes to distribute dividends with the funds, they can never retrieve their NSR.

Perhaps this is intended, in order to support NBT with a stronger backing? However, if so, there is little incentive to own NSR, which means that it might not be worth enough to serve as collateral for NBT.

[Sabreiib]

@Chronos , the pledge is to resolve decentralization of Nu although it’s a bit off topic here.

If Pledge is applied, we can have 1000 of small LPCs and they may build up buy/sell wall on NBT/USD pair with our BOT if techinical issues resolved.

The smart contract is flexible, if a custodian promises to distribute dividend, he can submit the request of pledging 1000NSR to borrow 1NBT and return 0.8NBT in the end, the 20% NBT is for dividend, this is up to shareholders vote. Perhaps thers is competition between LPCs.

In fact, the main profit as being a LPC is the price rise of their NSR, not just selling NBT income. In my opinion, NBT is our product/service, the Nu company can get profit from product selling/service providing to pay dividend, but the share price increment is also an important incentive to hold NSR.

The more iphones Apple inc sell, the better quality of iphone, the higher share price of Apple; the more NBTs Nu sell, the more stable NBT is (better quality), the higher NSR price.