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.
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.
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?
To really understand something as profit we need to see the long term effects. For now perhaps we can look at the the increase in buy side funds. I guess more than 10k NBT were sold for BTC which were then put in tier 4, so that can be considered revenue.
Overall, Nu is more in the red than in September 2015 at least by 3.5k NBT.
Assets have increased at least by 850k NBT.
Liabilities have increased by 13k NBT.
I have added Nov 15 and Dec 15 P&L evaluation attempts.
I ve realized that evaluating operational expenses is easy to determine because the definition is clear but evaluating sales is difficult because the nubits you sell once can be bought back later and put back into sales once again.
So at the end of the day you need to evaluate the balance: the difference between the nubits out (brought in) and nubits in (brought back) from Tier 4.
It is too difficult to track manually.
I think the best is to have an idea of the operational expenses each month while looking at the assets (NSR, reserves) and liabilities (outstanding nubits)
The NSR buybacks calculation is key for determining the assets.
Therefore I think we cannot determine how much revenues we generate.
Instead we should determine how much reserve we have at the end of each month.
What do you think?
if there is no buyback and transfer funds to stable reserve, the change of (dynamic reserve - outstanding_NBT) is a good indicator of revenue in a given period. There are sources of random fluctuations because btc in gateways are not counted and nbt in gateways are counted as outstanding. keepers of gateways only send funds back once in a while, making the funds shown again in the buyback calculation.
Very true. So there is reason for these features. Gateways are risky operations, and they are already counted in T1-3. When they (or other operations) shut down, our T4 operations grow while T1-3 shrink. This is basic protocol during a recession, to tighten up and pull back money into the core. As for stable reserves, they are also ongoing operations and are not usable for daily liquidity balancing, so buying them is like putting money in a safe.
Im not sure there is a cureall for boiling down the entire ecosystem.
I feel it is very difficult to define Nu revenues.
It is much easier to have a sense of assets and liabilities.
Perhaps we should only look at the buybacks every month to have a sense of profits.
Perhaps the identity Profit or Loss = Asset - Liabilities (I discard the equity part that I do not understand) could be used.
Asset = NSR market cap + reserves
Liabilities = Outstanding nubits (circulating)
EDIT: Maybe we can use change in (dynamic reserve - outstanding_NBT) + buybacks
Liquidity ops sell and buy nubits. nubits get consumed in tx fee and get burned for whatever reason. They all get folded in to changes of outstanding_NBT. Changes of outstanding nubits is an accurate account of changes of Nu’s liability. If there is no buyback or transfer funds to stable reserve, then the change of dynamic reserve is the change of circulating nubits, which is an accurate account of Nu’s asset due to operations (not including share price changes). So the change of (dynamic reserve - outstanding_NBT) is an accurate measure of asset minus liability change.
The best way to do this would be to require each operation that bridges T4 with T1-3 to report a particular straightforward version of profit and loss and simply sum across operations.