KTm had the following on deposit at Exco.in:
It is not yet clear if any of this will be available for withdrawal. In the worst case that it is all lost, there is presently 116540 NBT in tier 1 liquidity that can readily absorb the NBT loss. This does not include funds in tier 2, tier 4, what is available via NuShare sales or interest rates.
We have been in the process of implementing tier 3 liquidity, which will be held by LPCs off exchange but available for automated deposit onto the exchange. In scenarios like this, tier 3 liquidity cannot be lost. So we were already on a path to making tier 1 and tier 2 liquidity much thinner because additional funds will be moved from tier 3 as needed. Today, we had more in tier 1 because tier 3 is not yet automated. Tier 3 automation will do much to mitigate the loss in events like this.
While shareholders must bear the loss in this case because KTm was using shareholder funds, if the original design of decentralized liquidity had been implemented on Excoin today then shareholders wouldn't bear any loss at all. Many of you are aware that full implementation of decentralized liquidity (and a complete phase out of LPCs using shareholders funds) has been a high priority for me. The only globally pinned topic on this forum focuses on that transition.
What does it mean that shareholders will bear this loss? It means the lost funds won't be available for dividends, NuShare buy back and burn (would have increased the NuShare price), or NuBit buy back and burn (would have decreased network liabilities).
I had resolved to introduce a motion several days ago. I'm still composing that, but I will reveal that it includes completely ending the operations of KTm and Jamie in 90 days. I will also present a vision of how liquidity operations will function in their absence as we continue moving toward our original design of zero reserves.