Minor and temporary modifications to liquidity model


#1

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 motion’s 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.


Supply, Reserves, and Equilibrium (superseded by automation)
#2

How much is the NAV difference because of this?
Is the difference positive or negative?
@jooize, this might be a question for you.


#3

I’m fully aware that Nu is the most transparentestest business in the whooooole world with publicly verifiable accounting and what have you.
Unfortunately I don’t have access to the exchange accounts.
But wait, I remembered that I do have, even though not directly!
Thank you @woolly_sammoth!

@jooize, you seem to be very busy.
Let me try to lend you a helping hand regarding the NAV.

This is the NAV from 07 Sep 2017 00:00:00

And this is the NAV from 14 Sep 2017 12:00:00

Let me do the math.
On 07 Sep 2017 00:00:00
$1,389,356.08
+$396,304.8
+$620,007.37
=$2,405,668.25

On 14 Sep 2017 12:00:00
$900,004.90
+$782,957.74
+$182,514.37
+$159,225.33
=$2,024,702.34

$2,405,668.25
-$2,024,702.34
=$380,965.91

In the last 7 days the NAV went down by $380k.
That means 380,000 USD less to back NBT as a result of the last 7 days…

The source of the screenshots is https://nu.crypto-daio.co.uk/charts/usd_nav in case someone wants to verify that.

If you are going to tell me that it’s due to the declining BTC rate, you are only two steps short of understanding why using BTC to peg to USD is a bad idea :wink:


#4

You want a centralized stable digital currency. We’re not interested in that here. Tether (USDT) appears to be at the forefront of projects using that liquidity model.

NuBits is designed to protect customers against the volatility you’re pointing out like you expect us to be shocked about it. We’re fully aware of that the cryptoassets can decrease in value. It’s why we don’t run a 100% cryptoasset reserve. It’s no surprise to any of us that our cryptoasset reserve declines in value when the assets within it do.

You’re not interested in our model, you continue to criticize it on grounds that don’t have the relevance you hope they will seem to, and you insult us ongoingly.


#5

No I don’t. I like bitUSD very much.

By making future NSR buyers pay for the protection? I can see that. You’ve been there more than once.

We’ll talk about that relevance later.
I thought you’d have some sense of humor. I do :slight_smile: I’m sorry if I came across as insulting.


#6

Quit your bullshit. You’re trying to poke at us any way you can for your twisted amusement.


#7

Hi @jooize, while financial institutions are subject to publicly known regulations, Nu operates at least under the radar, or more precisely, under its own law which is not known to any respected and established legal institution in the world. For the protection of all your customers, may I kindly ask you to prepare an official statement about the dramatic decrease in net asset value and the devastating consequences that might entail under quite a lot of circumstances for unaware investors and customers alike. I ask you to put that up as a pinned message on this forum in a visible way right now! I am only trying to protect people from the harm you caused in the past. Please do not ignore me out of financial self interests.
Thank you


#8

No, because it’s an entirely expected situation in line with how NuBits has publicly presented its operations for years.


#9

This is not true. By no means would you comply with the transparency requirements of a standard financial institution. And you call yourself the most transparent financial institution in the world ; ever thought about the possibility that that could break your neck?


#10

Customers that buy NBT on Bittrex do not know that you pay yourself anonymous sums of money and that the NAV is insanely negative within just a week`s time. Put up a warning, I urge you to do that to protect your customers! Everything can happen, and we know what @Phoenix / @JordanLee / @jooize did to scam customers last year to its full extent. I kindly ask you to put up a warning about the risks involved, so that they are publicly visible and comprehensible to any new NBT customer / victim.
The minimum you can do is to say “if I get hit by a car tomorrow, all funds will be lost”. @jooize, please let your customers know that!


#11

I offer you a deal. I quit my ‘bullshit’ if you quit yours.

Quit asserting that you could in any way buy NBT of all customers without losing the peg.
Once the reserves are dry, the peg will fail. It’s a matter of how many greater fools you find and how big the debt is whether it can ever be restored. Nu is broken by design and sailing along hope.

Quit asserting that Nu is decentralized.
You are still one single point of failure. In a way Nu is at the moment more centralized than Tether, which you despise.

Quit asserting that pegging to USD through BTC is a good call.
Recommendations for how to run the business in a more reliable way and less dependent on BTC rate have been made. I won’t dig them up for you, because you and the Lord of Losing Funds don’t care.
And obviously ‘the shareholders’ don’t care either.
So why should I waste my time on that? I rather spend my time dissecting your flawed business scheme.

Quit asserting that protecting customers is important. Do you care about shareholders?
To be honest: it’s not the present and future shareholders I care for. They should make their due diligence before they invest like I did mine. And then I shied away from investing.
It’s the NBT holders, who don’t have an effing clue how much risk they bear, if they don’t spend an extensive amount of time reading this very forum.

If you plan to quit this shit, you can start researching NuSafe and recommendations from @Sabreiib.
In the end you will come up with something similar to bitUSD if you want to make it thoroughly.
Better face that competition than continuing this way to doom.
Or you could introduce a brand new type of currency like the one I proposed as QGM ETF. You will need to compete with e.g. Indicium, though, which has way leaner business processes, operations costs and will likely beat you to such an index product.

I realize that in your stubbornness you can’t even recognize that I’m willing to help and only focus on the parts of my posts that needle you. It’s your responsibility to evolve and make educated decisions.

Try offering less surface to do so, if you don’t like being poked :wink:
Why so averted to amusement? Haven’t you learned from Sunny King: have fun!


#12

Update for the NAV.
15 Sep 2017 10:00:00

$1,080,004.88
+$583,648.24
+$69,463.99
+$169,468.83
=$1,902,585.94

$2,024,702.34
-$1,902,585.94
=$122,116.40

The last 22 hours alone Nu lost $122k
Since 7th Sep half a million USD.

NAV declined by $500,000 over the course of 8 days.

You don’t have enough reserve to buy back all circulating NBT. Pray that BTC doesn’t start to rise very soon and very fast, otherwise you will experience a rough ride :wink:

But hey, you can as well close your eyes, pretend all is good and continue with the NSR buybacks.
I’m sure there are several hundred million NSR in circulation that want to be bought before Nu blows up!


#13

They are being reduced

That is just FUD.

Correct, BTC and many other top 10 coins lost over 25% of their value. Crypto is volatile. Going back up as we speak.
Everyone can follow NAV here any day: https://explorer.nubits.com/charts/usd_nav

We never promised that, just happened to be like that recently, but not any more. As per the link above everyone can follow that on a daily bases and make decisions whether to invest or not.

Does BTC have the market depth to pay back everyone at the current rate? Sure not. The last ones will be massive bagholders. Pray that it doesn’t happen. But what is the chance that it happens? Your guess is as best as mine.

Please be clear that I prefer a higher NAV / higher reserves as long as crypto is extremely volatile, but they come at a cost. And I’m with you that at least some of the reserves should be held in something else than BTC. Index funds would be an option, however the latest slide would have taken even funds like Indicium down at least 20%. USD crosses the boundary to fiat which will likely get increasingly more difficult or costly on centralised exchanges. Not a good long term solution.


#14

You can write all you want, but you doesn’t make Nu money on the one hand and bleeds out on the other hand from trading in the BTC pairs pegging to USD.

The several hundred million NSR that want to get bought refer to the NSR lost by Phoenix.
Or shall I say stolen by Phoenix? In the end it doesn’t matter, because I can’t prove he stole them and he can’t prove he just lost them.


#15

As you can :slight_smile:

The business model is not working on the current small scale long term without other revenues such as lending money and without B&C operational to profit of on-chains fees when trades occur. That doesn’t mean it cannot survive until such time.


#16

Do you know the Nu whitepaper?
Do you understand how it’s superior to pegging through BTC?
Have you considered @Sabreiib’s proposal?

Nu chose a bad way. The architect did.
Why turn a reliable scheme into one where you are prone to BTC volatility?
Why?


#17

That was the first thing I read to understand Nu. The business model has evolved and maybe not in the best way.

Not sure what you are referring to. Hayek’s money?
I think the whole crypto space in itself is a form of Hayekian way. Not sure on a single currency following this model rigidly, but it is definitely interesting as is Nu.

I think you know the main answers:

  1. Making as much money early on
  2. Making use of more liquid markets which also contributes to 1
  3. The alternatives appeared too complicated or too costly at the time.

On a side note, Tether is venturing outside the BTC world: http://www.newsbtc.com/2017/09/16/tether-will-issue-tokenized-us-dollars-ethereum-blockchain/ It will be interesting to follow.
Offtopic: And did you notice that they also create money out of thin air, over 400 million by now :wink: I believe there is more data available about the NAV of Nu than Tether. And they are no longer ‘under the radar’ so risk is increasing. Just my recent observation. And BitUSD is an interesting approach but I believe too expensive and uncertain. Fully backed currencies didn’t survive in the last 30-40 years. Did you know why? BitUSD may not survive because of the same reason. Just saying there is always room for improvement and there is no single fact of which system is the best (yet). We just go what we think might be best (for us). Time will tell.


#18

i agree that it is difficult to argue that tether is more transparent than nubits…maine reason thether does not publish their reserves…


#19

Tether does report what they claim to have in reserves.

https://wallet.tether.to/transparency


#20

But they don’t show where the reserves are. In a US$ bank account, in BTC? It is easy to show a number on the website.