NuBTC

[Nagalim]

Pegged to 1 BTC, NuBTC/BTC pairs would essentially be like nubit/fiat pairs as far as holding the peg. The key would be tying it into NBT, such that you can burn across the NuBTC/NBT divide on the block chain. This way, we completely move hedging costs onto the network and off the hands of our liquidity providers. This allows us to use very small spreads in our tllp’s and build the spread into the burning mechanism. All liquidity provision would have zero hedge risk, as Nu would shoulder that burdeon using a much more convenient method of risk/reward analysis that can easily be revamped. Without NuBTC, we are forced to provide liquidity providers with a spread and a price feed.

Just some thoughts.

[desrever]

The key would be tying it into NBT, such that you can burn across the NuBTC/NBT divide on the block chain.

Could you expand a little on this point?

EDIT: discussion from the past worth bumping NuNet deflationary asset as the next product?

[Nagalim]

All the conversations we’ve had about nsr/nbt burning apply here. (Stuff like Some Suggestions To Eliminate Peg Maintenance Expenditures)
Interesting link, I’ll need to read more in depth. However, with these kinds of concepts, we don’t even need B&C, all trading could be done on the block chain via burns. Ultimately, nbt and NuBTC would be distributed to anyone willing to burn nsr for them. Nsr are distributed for providing service to Nu.
Kind of as a relevant side note, I’d be totally down with making NSR unspendable in any way other than burning.

[desrever]

how do you imagine to fund the buy wall on nuBTC_BTC pair?

Why would someone change their very liquid and wide accepted BTC for nuBTC?

NuBits are faster to transfer, so they might be leveraged for arbitrage . Or putting a constant buy pressure by offering a non-zero interest on parking .

[Nagalim]

Why would someone change their very liquid and wide accepted BTC for nuBTC?

Custodians are compensated with NSR in a tllp. Why would you just hold btc when you could hold btc and get paid NSR for doing it? In the beginning, liquidity compensation may be large, but definitely far less than the 100%/year or whatever absurd amount we’re paying for nbt/btc buy side liquidity now. There is no hedging risk, and as NuBTC becomes more accepted the compensation will go down. Also, they always win on the custodial spread by putting up a buy at .995 and a sell at 1.005 (or whatever).

Also, if NSR is unspendable, if you want some shares and you aren’t a programmer or a liquidity provider you have to buy NuBTC (or nbt or whatever) and burn it.

Edit: in this model we don’t even really need park rates as they are kind of redundant. Mint rates and tllp rates are enough.

The changes required to accomplish this are large. The first steps are nbt/fiat pools and burn mechanisms, which do seem to be on the forefront of the collective mind. It’s important to be aware that multiple burn mechanisms can in theory take place at the same time, but we want to be careful about how we distribute a) our developers time, and b) our block space. This is not the only way that Nu will become profitable (tx fees, loans) or adopted (payment processors, marketing, stable exchanges, gambling websites) but it is a useful core concept of peg maintenance, in my opinion.

[Nagalim]

NuBits are faster to transfer, so they might be leveraged for arbitrage .

Oh yah, this too. The NuBTC blockchain would be secured by PoS and the parameters can be tuned at the shareholders wills.

[Cybnate]

The changes required to accomplish this are large.

I like your thinking but this is indeed not easy to implement.
Although the risk to exchange BTC for NuBTC is still different as you would be dependant on the exchange liquidity and the peg holding. So they will be less attractive to hold than the real thing by default imo. Given the right compensation it can be used as a savings account or so. I don’t see the adoption of NuBTC beyond that (e.g. for payments) happening.

[Nagalim]

For payment, NuBTC is likely less useful than NBT (though BTC also isn’t really useful for payment, yet that’s what everyone wants to use it for). BTC is a commodity, think of this like NuGold.
Adoption cases (in somewhat chronological order):

1. liquidity pool provision and compensation
2. method of attaining nsr (especially if nsr is unspendable)
3. arbitrage using a faster blockchain
4. Ability to hedge via burn auctions without trusting an exchange.

I agree NuFiat is a better product, but I think NuCrypto compliments it by providing something familiar and volatile that can be gamed (case 4). We would indeed pay more compensation the less people wanted it, but I still think the payment would be far far less than what we pay for hedge risks.

If I have nbt, and I want crypto, what do I do right now? My only option, basically, is to wait for btc price to spike and drop it on the buy wall. Eventually, we will also provide the option of burning for NSR, then selling the NSR to get the crypto you want. This is rough though, because nsr markets are not very liquid.
If I can burn my nbt to nsr, then burn the nsr for NuPPC or NuBTC or whatever, I won’t even need to sell it on the wall unless I want to actually have the coin for whatever reason (like ppc minting). Most of the time, I am simply trying to play the market, and a token is just as good as the real thing. NuBTC can be thought of as BTC on the “exchange” of the Nu network. Most other exchanges contain serious centralization and wallet risks. This is PoS secured and all trades are done from a wallet on your computer via the block chain. And Nu gets all transaction fees.

[Nagalim]

It would look like this:
Block chain votes 1 or 0 on each supported NuAsset (start with NBT and NuBTC). 1% NSR, 1% NBT and (1%+1) NuBTC are created each day. If a NuAsset votes 0 for the day, the sold and seed for that asset is distributed amongst nsr burners proportionally. If it votes 1, a portion of the NSR seed and sold dependent on that asset’s “weight” is distributed to asset burners. We determine weight via hard code or continuous voting, it determines how much of the nsr seed goes to which asset and represents how important that asset is to the nu network.

The biggest issue here is that you’re bound to end up with assets you don’t want if you submit nsr for an auction, though you can just submit the undesired assets in the next auction (or put em in a tllp or whatever).