Loan business of Nu

I just wonder if we can develope a loan business.

For example, in 2016 I’ve bought Nushare of 2000$ value, I submit a borrow for 1 year to system, and other shareholders pass it, so I get 1000$ value Nubits,ie 1000Nubits with 5% annuual interest rate.

The reason I wanna boorrow Nubits is that i need that money to do sth and don’t wanna sell my Nushares because I believe its price undervalued. In 2017 I have to pay system 1050Nubits and the extra Nubits from my FITA buying on exchange. If I fail to reture those Nubits in time, lose my Nushares.

Load interest rate is always higher than pack(deposite) rate, that’s common profit of business bank.

In this way, the system has another way to control turn volume of Nubits, just like packing via adjusting the loan rate. As Hayek said, if a bank stops loan businness or decrease borrow need by high rate, the payback Nubits continueouly returning to system will lead to less Nubits on the market.

Two goodness:

1)make profit for system
2)additional way to control NuBits on market

There must be some Nubits under the control of custodians or system, Nu system can buy back some Nubits, is that right? Those Nubits owned by system can be parked without interest rate for any time.

People pack Nubits to get more Nubits, and this makes the whole volume increasing, more potential sell presure on LPC. With loan business, Nu can attrack more FIAT into this system and get more Nubits in system’s hand, so more price control ability.

good idea. We should probably get in touch with this guy :

Maybe now is a good time to think about this kind of activity.
The buy side liquidity (80k) is relatively large compared to the daily trade volume recently (10k).

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There have been many other posts on this topic. Lending is a very nice long term revenue source. The issue is one of collateral, which ends up looking like a reserve issue and before you know it we’re implementing bitshares.

So, nsr for collateral is a blackswan issue. What happens if the nsr is worthless? Bitshares covers this by using 300% collateral. My opinion is that we can use our liquidity tiers.

We can use seeded auction prices or share buyback prices to determine the loan rate. Then, we can loan nbt at that price up to a certain amount of nbt and lock the nsr funds under multisig. The question becomes how we determine the maximum amount Nu loans out in total. The rate can be voted on by shareholders.

So a tantalizing solution is to have the maximum amount loaned be equal to tier 1 sell side minus tier 1 buy side. However, we cannot truly rely on the liquidity submission system for important protocol parameters. We could vote on it, but that seems to lack elegance.

Edit: Nah, there’s still the default problem. If NSR price goes down and people can buy the NSR back from the seeded auction at a lower price than they loaned for, they will default. The bitshares mechanism seems to be the best solution here.