Is the Nu network actually looking to only expand in crypto currency related areas or would it generally be possible to propose a business idea for crowdfunding that includes, among other cryptos, Nubits as a means of payment but pursues a complete different business model compared to what we are used to now? If I wanted to open a store and would present a convincing concept, would Nu support blockchain based IPOs?
Curious about the scope of the Nu network. Couldn’t find anything on that topic.
Not sure what you mean, Peershares is a framework to issue stocks that you can sell for Nubits (if you choose to). There should be ways to implement stuff on top of Nu’s blockchain for features like contracts and stocks but that introduces blockchain bloat.
I like the idea of Nu issuing loans in the future using some form of smart contracts. Perhaps we could even add margin trading to B&C Exchange sometime in the future. If its technically possible that would add tons of additional volume and revenue for B&C.
Loans are exactly what BitAssets are built on. It would be wonderful if we could put this kind of collateral mechanism in our network. If we limit its volume in a smart way I could see it being very useful. However, if the asset drops by more than the collateralization amount, does Nu just eat it? BitAssets tries to make it tasty for people to margin call the short. But at that point we’d have a virtual exchange like openledger.
We could set risk parameters for different assets. So for example we could set a risk parameter of 0.5 for BTC meaning a person could lend up to 0.5 x BTC value per every BTC put in collateral. Say we accept collateral in 5 different crypto’s we could have a different risk parameter for every commodity. Such risk parameters should be based upon volatility and size of the crypto (the bigger a market is the more “established” it is and less risk of it collapsing overnight).
Risk grows the more we accept one kind of collateral in addition to loaning out too much of a currency that does well. So the pair would have a risk factor (say 0.05 for NSR and 0.5 for BTC) and they would be multiplied together. Each risk factor would be a function of the size of the loan as well as the other loans the network has already given out.
I see a model in which people can only borrow NBT from us and they can use various crypto’s (BTC, NSR, BKS, PPC, LTC, NMC, and others) as collateral. The amount they can borrow depends on the amount they put up as collateral + its risk factor (which would be determined by the crypto’s volatility and relative size/volume). Every now and then we might lose funds due to unforeseen crashes of a certain asset we have as collateral but overall I think this could be a very profitable enterprise for Nu.
I would be supportive of loaning if the purpose was to create businesses/DACs/DAOs that added value to the Nu Network and helped it grow. A prime example of this is B&C Exchange.
I am however not supportive of general loaning, for example car loans, mortgages and business loans that have nothing to do with Nu. These types of loans should NOT be made directly through Nu, rather they need to be handled indirectly through 3rd parties. In the same way that the Federal Reserve provides the currency in the form of the USD for normal banks around the country, who then loan it out to customers, the Nu Network would provide the currency in the form of NuBits to 3rd party banks/loaning institutions around the world.
Nu already carries a great deal of risk in keeping its peg. Adding even further risk by directly managing loans through Nu unnecessarily puts the peg in danger in the case that customers default on their loans. Nu should be in the business of providing the currency to 3rd party intermediaries who take on all the default risk.
Loaning requires some form of collateral and checking of identification and credit in order to successfully loan to the right people who will actually pay back their loan. It’s difficult to carry this process out in a decentralized way where customers are anonymous. 3rd parties can operate NuBit loaning businesses in their local areas, check credit, do background checks and require whatever collateral they need to feel confident the loan will be paid back. If these 3rd parties are successful in their loaning operations, then Nu will profit through increased demand and printing of more NuBits. In the far future, these 3rd parties could possibly become as big as the largest banks in the US, such as Bank of America, constantly purchasing NuBits from NuShareholders that could then be loaned out to customers.
This is just my opinion of course. I think loaning directly through Nu is both difficult and dangerous to the peg without a way to accept some form of collateral and verify identity and credit history. These things are vital to a successful loaning operation. Without them, it would be difficult to weed out the people who would fail to pay back their loans. 3rd parties will be able to conduct business in person with potential customers, verify ID, credit and have the law on their side when people fail to pay their loan back and it comes time to collect the collateral that has been guaranteed with a signed contract. A decentralized network can’t manage all these things. Because of this, I believe 3rd party loaning institutions will be very important to Nu in the future.
Maybe we should be the first ones to fund one of these NuBit loaning businesses, to help get the ball rolling. If it’s successful, it could encourage more people to start their own loan business.
The currencies we accept as collateral are of course to be voted in by Nushareholders, I just listed a few that came to mind. I think additional functionality on B&C should be able to handle the technical aspect and the how’s of lending as well as supporting margin trading/futures. We can have a new Tier level dedicated to supplying Nubits for lending though B&C.
The difference is that the Federal reserve charges interest over the dollars they lend to banks and we do not charge interest over the Nubits we “sell/lend”. I feel if we are conservative enough with risk ratio’s we put out loaning could be very profitable and a logical next step for Nu. We don’t require background checks and identification instead we require solid collateral that we hold while the loan is active. This is very different than a bank whom in general do not require collateral and if they do its usually property. The loaning we do is much more simple and straightforward then a loan a bank gives out.