Currently, the amount of daily NSR buyback or sale is 1% of the difference between the reserve equilibrium amount and the actual reserve amount. It is designed to adjust to changing levels of demand for currency fairly quickly, but not so quickly that the NSR price is subjected to sudden and disorderly price changes (within the limitation that NSR possesses more volatility than most blockchain assets, by design).
Two new factors have emerged recently that justify temporary changes in the percent of excess reserve we devote to daily NSR buybacks and in the way our reserve percentage in calculated.
The first is that the circulating NuBit supply has been exceptionally volatile recently, with it doubling in a day recently, and nearly halving on another recent day.
The second factor is that we intend to invest in additional marketing and development that will increase operating expenses quite a bit in the coming months. More details will be made available as we work them out. I intend to advance a motion authorizing the substantial increase in investment in marketing and development. One of the motionâs provisions will be to segregate funds for expected operating expenses for a period of approximately 6 months. This will have the effect of reducing NSR buybacks.
These two recent emerged factors warrant holding a larger reserve temporarily. The last comprehensive accounting on September 11th, reserves exceeded circulating US NuBit supply, so our reserve level is currently already higher than at any time in our history. The change is not being undertaken due to any shortage in our reserves: indeed, there is an abundance of them right now.
While it is generally desirable to have symmetry in the liquidity model, with policy applying to both NSR buybacks and sales, this modification will apply to NSR buybacks only. The reason for this is that if the network switches back to NSR sales then the two factors prompting this modification will have disappeared, in all likelihood.
The modifications are as follows:
1. The amount of daily NSR buyback, currently set at 1% of the difference between the reserve equilibrium amount and the actual reserve amount, will be reduced to 0.6%, effective immediately.
2. The reserve percentage shall have a minimum value of 0.4.
These changes are temporary and will be revoked when operating funds are segregated and when the currently high volatility in the NuBit supply subsides.