Monthly P&L of Nu

Nagalim 2015-08-05 04:31:24 UTC #9

The nbt debt needs to be understood in terms of what we know will be held in a given time period based on factors like development fund, sell side liquidity, and parked nbt. We can lump what we know will be sold (development and the like) in with the free floating nbt and subtract off the buy side liquidity. Then, compare that result to the total nsr marketcap defined by nsr in circulation * most recent auction price. You should find that we come out over an order of magnitude ahead.

mhps 2015-08-05 05:39:18 UTC #10

Where does the buy side liquidity come from? In the beginning of Nu they were from fund paid by shareholders at IPO. The NSR marketcap already reflects this fund (why else the NSR price hovers at IPO price?) which is part of Nu asset. They are already counted in the asset part.
Then self-funded LPCs provide both sides with their own fund. Foundamentally Nu has no control of pegging liquidity fund. Only when Nu demonstrates very good financial health can we expect LPCs not to pull their NBT (to sell for other currencies).

It was right to count different sources of liquidity when analysing health of the peg. But these days I think it’s irrelevant in asset-liability analysis.

cryptog 2015-08-05 08:29:43 UTC #11

I do not think we can consider that as asset. To me it is just revenues (renaming P&L as Revenues/Expenses should be more accurate in reality) that need to be immediately distributed as dividends or used to buy back NSRs and burn them.
Oddly, you can see here by the way that revenues can reduce the NSR supply, reducing NSR market cap, reducing the assets of Nu but then if the supply is reduced, it should increase the unity price of NSR, so at the end, there is no contradiction.

Another thing is that normally, dividends should be created from the profits.
Profits = Revenues - Expenses.
So sensu stricto, shareholders should not distribute dividends directly from the NuBits proceeds, but wait to have the monthly profit statement, which assumes the calculation of the expenses.

mhps 2015-08-05 12:23:48 UTC #12

What is that you refer to?

Right it seems to be a paradox but it is not.

We just happens to call it dividends when using peershares client to distribute fund to shareholders. Maybe we should give the fund distribution a different name.

cryptog 2015-08-06 04:10:54 UTC #13

The proceeds of NBT’s sales.

Right. Since the “dividends” are taken directly from the earning, it is closer to some form of salary.
So what about compensation or remuneration?

By the way, the wikipedia def of a dividend.

A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits.1

cryptog 2015-09-06 09:21:16 UTC #14

Attempt to determine the P&L of Aug 2015.

The parts mentioning a ? are unknown to my calculation. Please feel free to complete it if you have some info or hints.

REVENUES

sold NuBits: 0
tx fees: ?
burned NuBits: 0

EXPENSES

liquidity pools expenses:
– LiquidBits term 3: 596 NBT
– NuLagoon Aug grant: 4315.19 NBT
other grants:
– NuDroid server grant: 300 NBT
paid parking interest: ?
–> At least: 5211.19

PS: According to this, at least 25k NBT were unparked in Aug. So that implies that some interests have been paid in Aug.

Since the tx fees are negligible, the above-mentioned calculation suggests that Nu is at least 5211 NBT in the red for August 2015.

crypto_coiner 2015-09-07 01:48:57 UTC #15

How do you define “sold”?
Many NBT sold is being bought back by LPCs.

cryptog 2015-09-07 05:30:58 UTC #16

Yes. Well just the ones that were brought to market and sold by elected custodians that got a grant from shareholders.

crypto_coiner 2015-09-07 07:16:15 UTC #17

NBT never get to be sold, as per the common meaning of the term, since they are re-bought back.
I think one should indeed talk about tiers and which one side (buy or sell) the funds were originally placed onto.
For now, Nu is not in the business of selling NBT because people still want to redeem them for dollars or other cryptos -
Nu is in the business of providing liquidity of selling AND buying NBT, according to the demand. One day perhaps the demand would be so great that it would be reasonable to say we SELL NBTs?

masterOfDisaster 2015-09-07 07:54:14 UTC #18

Please don’t confuse liquidity providing with issuing and selling NBT!

At the moment it isn’t but some months ago it was

How do you think the 562,036 NBT came into circulation if not by having been sold to people?
This was in a time when liquidity providing wasn’t decentralized but handled by @KTm and @jmiller.
A lot of the value that was retrieved for selling the NBT got lost during the February exchange hacks.

If Nu were to sell 100,000 NBT tomorrow, the revenue needs to be distributed to NSR holders, because they are the ones responsible for keeping the peg. Being responsible for the peg includes at worst case issuing NSR via grant to sell them, buy NBT and burn them.
As NSR holders are ultimately reliable for the NBT peg, they need to get the revenue from sold NBT.
Whether that is done by dividend distribution or by NSR buybacks is another topic.

crypto_coiner 2015-09-07 08:02:33 UTC #19

Would you have any rigorous definition for both?

crypto_coiner 2015-09-07 08:05:42 UTC #20

I don’t have a clear idea on how we reach “562,036 NBT”

masterOfDisaster 2015-09-07 08:09:18 UTC #21

Mmhh… in one case Nu sells NBT in the other case it doesn’t?

Liquidity providing has nothing to do with Nu selling NBT.
Nu sells not a single NBT in @henry’s NuLagoon or all the ALPs.
Nu just incentivizes people placing buy and sell orders.

As NBT are granted for paying the compensation for the liquidity providers and nothing is getting distributed to the NSR holders (there’s no revenue just like there is no spoon in the matrix), this appears as a position on the expenses and not the revenues side.

crypto_coiner 2015-09-07 10:15:59 UTC #22

This is getting philosophical - I appreciate it
This allegory suggests you can transfer the LPC compensation on the revenue side if one changes one’s perspective and realizes some truth (trust in NuBits?)

masterOfDisaster 2015-09-07 10:26:48 UTC #23

Not really, rather getting for the accounting department!

Should assets total the liabilities plus the equity in the balance sheet?

JordanLee 2015-09-08 23:05:23 UTC #24

To help bring clarity to the topic at hand, $5769 was spent in August on development and marketing out of my budget. This includes the portion of NuBot development not charged to B&C Exchange and core client development but does not include marketing done by Cybnate or NuDroid development.

I had mentioned several times that we were quickly cutting expenses down to below $10,000 per month on average. I’m proud to say we have accomplished that while still delivering 2.0 and beginning development on 2.1.

In order to accurately calculate P&L better visibility into tier 4 liquidity is needed. I have pleaded quite publicly for the administration of those funds to be taken over by others. It isn’t the best use of my time and I am sure others can do a better job. As such, I’m more interested in finding ways to incentivize others to do the task than I am in spending more of my time improving how I do it. Accordingly, I am composing a motion intended to facilitate the transfer of these funds to others, which should also make efforts to calculate P&L easier.

[Draft] Frequency Voting

cryptog 2015-10-03 07:32:23 UTC #25

Attempt to evaluate the P&L of Nu in Sep 2015

I have created a Google Excel Sheet.
Please find my evaluation in the following Google Excel Sheet:

The unknown values are:

tx fees
paid interest rates (this suggests that 3k have been freed. So some interests have been paid.)
development expenses
marketting expenses

Any suggestions are welcome.

We are at least in 13135.87 NBT in the red since tx fees are negligible.
If the development expenses and marketing expenses are comparable to Aug 2015,
my calculation suggests we could be 20k NBT in the red for Sep 2015.

Current Liquidity

Nagalim 2015-10-03 07:44:09 UTC #26

If you also record the change in the NSR marketcap for Sep 2015 and compare it to this number, it would be instructive for me. We’re hoping for not only green (NSR>NBT) but that the market cap grew many times faster than NBT. Then we know we’re on the right track, we want to make sure we’re growing as we grow our debt.

Best estimate I have for this in august is a negative marketcap change of something like 200K compared to the 13k NBT (by the way, I’m only seeing a $5k increase in NBT market cap between august 1 and september 1). So august was bad for us. However, September is looking well depending on how we choose to look at the 200K price spike at the end of the month.

Or at least include the share buyback funds. It was $2506 by estimate.

cryptog 2015-10-04 02:49:28 UTC #27

I am supposed to track the revenues and expenses each month here.
But since printing NBTs increases Nu’s liabilities while bringing revenues, it is true that it is difficult to uncouple P&L from Assets/Liabilities.
So I agree. It makes sense to track the market cap of NSRs and NBTs and the change month by month.
I will add such fields and start filling them.

Those 13k are not newly printed NBT for the most part. So it is natural that they do not increase the market cap.

The buy back occurred in Oct. So I will include them in the Oct settlement.

EDIT: the sheet is updated

MaVo 2015-11-05 22:05:01 UTC #28

Especially in times of the current high Nubits volume, I would really like to know whether it is possible to derive a reliable number that can be understood as profit? Is there any simple way to get a rough estimation, like a % of trading volume or anything?