Minor and temporary modifications to liquidity model

[ConfusedObserver]

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

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!

[Cybnate]

But hey, you can as well close your eyes, pretend all is good and continue with the NSR buybacks.

They are being reduced

I’m sure there are several hundred million NSR in circulation that want to be bought before Nu blows up!

That is just FUD.

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

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

You don’t have enough reserve to buy back all circulating NBT.

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.

[ConfusedObserver]

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.

[Cybnate]

You can write all you want

As you can

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 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.

[ConfusedObserver]

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?

[Cybnate]

Do you know the Nu whitepaper?

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

Have you considered @Sabreiib’s proposal?

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.

Why turn a reliable scheme into one where you are prone to BTC volatility?

Why?

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 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.

[cryptog]

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

[jooize]

Tether does report what they claim to have in reserves.

https://wallet.tether.to/transparency

[Cybnate]

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.

[lissajous]

Their reserves are held in USD. The centralization of Tether is actually strikingly similar to how Nu has operated for some time now. The only difference is that they do not supply any liquidity to the BTC/TETHER markets (and therefore do not suffer from volatility) and the owner is an identifiable person with a reputation they cannot run away from.

[Cybnate]

Their reserves are held in USD

Do you have access to their audit reports? Holding 400m in a bank account is unusual I would say.

the owner is an identifiable person with a reputation they cannot run away from.

Can we trust him with 400m? Based on what, previous records? I’m not convinced yet.

they do not supply any liquidity to the BTC/TETHER markets

That is an important difference. I don’t like Nu doing that either and I believe we need to find feasible alternatives for that in the mid to long term.

[lissajous]

Do you have access to their audit reports? Holding 400m in a bank account is unusual I would say.

I personally do not, nor have I spent any time looking. Where would you hold 400m?

Can we trust him with 400m? Based on what, previous records? I’m not convinced yet.

I think the market trusts them, and without credible competition, that is all that matters. It’s a bit of mental gymnastics to distrust Tether while trusting Nu, in my opinion.

we need to find feasible alternatives for that in the mid to long term.

This is something that I’ve been thinking on lately. I feel it would have been easier in the early days of Nu than it is with the current model we are working under as we’ve already suffered the losses for our product, and then helped move closer to the black, thanks to the volatility.

[ppitonak]

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.

I wonder shich full-backed currencies didn’t survive in the last 30-40 years? For bitUSD specifically, it’s technically possible to decrease collateral ratio. It just can’t be done now because it would be too fragile.

[mhps]

I would be willing to keep serious money in bitusd if the collateral ratio is above 5. Losing 70% value in a few days happens several times a year in btc futures markets, which i take as an indicator of what is possible for all cryptos once several years. That includes bitshares.

[Cybnate]

It’s a bit of mental gymnastics to distrust Tether while trusting Nu, in my opinion.

Not saying you should trust one more or the other. It is just about applying the same criteria when you trust someone or an organisation.

Where would you hold 400m?

Not saying
But seriously, you would invest in stocks, hedge funds, real estate etc. Money in the bank is dead money and is therefore expensive.

I would be willing to keep serious money in bitusd if the collateral ratio is above 5

Would you be willing to pay the price for it is the real question? Someone will need to provide that collateral which comes at a cost, which lead me to:

I wonder which full-backed currencies didn’t survive in the last 30-40 years

All major currencies on earth transitioned from fully backed by gold currencies into at best 2% backed by gold reserves. There is no currency on earth backed by more than 10% gold reserves as far as I’m aware.
Not saying whether that is a good thing or not. It is an observation, apparently the market forces demand this. Why? Because it is very expensive to keep all that gold and not being able to use it for something else, dead money.

Time will tell whether crypt currencies with full collateral or even 5 times collateral will survive or not. I believe the market will out price them eventually.

[ConfusedObserver]

Not sure what you are referring to. Hayek’s money?

I’m referring to a scheme similar to that of Bitshares.
Custodians receive NBT in exchange for collateral, here in NSR.
Nu doesn’t have to hold BTC, doesn’t have to make buybacks, liquidity is being provided by custodians, who compete with each other.

You see the obvious drawback and why this is being ignored? You can’t game this scheme easily to fill your own pockets. It was for a reason that the white paper got spurned.

Business wise what @Sabreiib proposed is far superior to this puppet theatre here.
I remember having read about auctions that could be used for NBT/NSR swaps. That idea wasn’t followed either. It’s not so different from @Sabreiib’s proposal and if I remember correctly, it was made by @Nagalim.
So many good ideas, that don’t get evaluated properly, sometimes even forgotten.

Oh, and you can see how well the interests of ‘the shareholders’ are aligned with the vision of the architect. The shareholders are willing to suffer huge financial losses just to follow the lead. Even if that lead is making only those rich, who know what’s going on in detail. These are just very few these days and I doubt it have been many more in earlier days.
Do you really believe Nu is shareholder wise not centralized? I’m not even talking about the ridiculous anonymous one man show handling several hundreds of thousands of USD value, who calls Tether centralized.

[ConfusedObserver]

All major currencies on earth transitioned from fully backed by gold currencies into at best 2% backed by gold reserves. There is no currency on earth backed by more than 10% gold reserves as far as I’m aware.

Not saying whether that is a good thing or not. It is an observation, apparently the market forces demand this. Why? Because it is very expensive to keep all that gold and not being able to use it for something else, dead money.

I can tell you what it’s good for having currencies that aren’t backes by anything, but promises.
You can exploit people more effectively.
If you want to educate yourself, have a go at Hayek’s ‘Denationalization of money’.

[Cybnate]

I remember having read about auctions that could be used for NBT/NSR swaps. That idea wasn’t followed either. It’s not so different from @Sabreiib’s proposal and if I remember correctly, it was made by @Nagalim.

So many good ideas, that don’t get evaluated properly, sometimes even forgotten.

I agree, that idea was great and ahead of its time and therefore under appreciated.

Do you really believe Nu is shareholder wise not centralized?

No, that doesn’t mean you can’t still have a decentralised coin. Not saying it is that now btw.

Nu doesn’t have to hold BTC, doesn’t have to make buybacks, liquidity is being provided by custodians, who compete with each other.

That model sounds great and I’m a big proponent of it. However we have seen its flaws, myself from very close having been an LPC for Nu. The cost are high in volatile markets and it is hard to compete for liquidity with BTC continuing to grow so fast. Still I believe there is no better system which decentralised.

Buybacks and dividends would be supplementary at best and mainly for marketing purposes.

[Cybnate]

If you want to educate yourself, have a go at Hayek’s ‘Denationalization of money’.

I’m a strong believer of the markets. And markets are manipulated by those with the most interest. With currencies that is mostly governments. The markets unfortunately not always dictate what is best for all stakeholders, only a few can outsmart the system. I doubt whether Hayek’s money can win the markets the way economies are run today (read with debt).

[ConfusedObserver]

m a strong believer of the markets. And markets are manipulated by those with the most interest. With currencies that is mostly governments.

You really should read ‘Denationalization of money’.
In a nutshell money is decoupled from governments, hence denationalized.
Money is like goods and markets make sure that better money prevails over worse money.
This scheme could be applied to how custodians compete to provide NBT at the closest possible spread that is economically worthwhile.
At the moment Nu tries to dictate what’s possible, but can’t. The markets do. Nu is just a bad central bank with people in charge by and large clueless about money and economics on the one hand and willing to exploit current and future NBT and NSR holders on the other hand.

Nu won’t change for the better. Anything that came after the white paper made Nu worse and exploiting easier. Phoenix will drop Nu like a hot potatoe, once he’s sure that he can’t gouge anything more out of it.
It’s easier selling NSR in buybacks than putting hard work into it, trying to make Nu a decentralized stable currency provider.
It’s a rational choice, but doesn’t make Phoenix a nice person
Considering how each transformation of Nu’s business scheme was supporting exploitation, I need to call Jordan/Phoenix a scammer.
The ‘lost’ billion NSR comes on top. But hey, it’s only one third of all existing NSR that got lost. Not so bad, right?
This couldn’t have happened with a multisig group trading NSR in seeded auctions.
You see how this ponzi scheme works?
Jordan can’t afford to have it truly decentralized. He needs to remain in control.