NuShare Auction

NuShares
#1

Following are the details of the upcoming NuShare auction that has been discussed. The consistently stated plan has been that 1 billion NuShares would be distributed, until this was recently modified by shareholder motion such that shareholders could decide on an ongoing basis using NSR custodial grants. This auction readily fits within the original limit for initial distribution, as the present number of distributed NuShares is a little over 700 million.

  1. 100 million NSR total will be auctioned.
  2. Bid deadline is the end of 6 March UTC.
  3. Maximum bid size is 30 million NSR. Minimum bid amount is 2000 NuBits.
  4. Multiple bids not accepted
  5. Bidders will not see other bids
  6. Best to bid early because if NSR sales are needed to support liquidity, sufficient NSR will be sold to the highest bidders at that time.
  7. Bidders must be business partners, which means you are or will be active in creating value for the network outside the scope of being a shareholder.
  8. A valid bid will contain three elements: a quantity of NuShares, a price you pledge to pay per NuShare in NuBits, and the asset type you will pay with (PPC, BTC or NBT)
  9. The price of BTC will be set at the auction bid deadline using the Bitfinex BTC/USD market price. PPC, being less liquid and subject to price manipulation, will be priced as the average of the BTC-e PPC/USD price 48 hours before the auction bid deadline, 24 hours before the deadline and at the deadline. Payments in BTC or PPC will incur an additional 2% fee above the bid amount.
  10. You may place a bid by sending a Bitmessage to BM-2cTihATJ5FwJ7vWBwZmJjr55eFPFWBCmCQ or an email to nsrauction@vistomail.com.
  11. Settlement will occur in the days following the bid deadline of the end of 6 March UTC.
  12. The highest bid, the lowest accepted bid and the total funds received will be publicly released when settlement is complete.
  13. The first priority for funds raised will be to ensure the buy side liquidity is equal to the sell side liquidity as displayed in the Nu client. PPC and BTC will be used to purchase NuBits to accomplish this if necessary.
  14. The second priority for funds raised will be to provide tier 4 liquidity. Suitable persons to hold these funds using multi sig addresses will be sought out. Hedging will not be employed due to counterparty risk. Tier 4 liquidity must be highly liquid, and BTC is the only instrument that meets this need at this time, although I hope that liquid NSR markets will permit NSR to be used as tier 4 liquidity eventually. The quantity of NSR for sale is as low as it is to limit the effect of BTC volatility.
  15. The third priority for funds raised will be the payment of contractors engaged in development. NuBits are generally used for this purpose, and in that case all that is needed is to ensure there is good buy side liquidity on the open market.

This type of manually administered auction is only needed because NSR grants are not yet allowed by protocol. When the upcoming protocol changes permitting grants of NSR have been implemented, shareholders may solicit public bids for NSR when NSR must be sold to support the peg. Bids will be approved by motion. Entities with approved bids will burn NuBits as payment, after which shareholders will approve an NSR grant in the amount and to the address specified in the passed motion. Additional evolution in the process of NBT burning and NSR grants are expected.

Send bids consisting of a quantity of NuShares, a price you pledge to pay per NuShare in NuBits, and the asset type you will pay with (PPC, BTC or NBT) via Bitmessage to BM-2cTihATJ5FwJ7vWBwZmJjr55eFPFWBCmCQ or an email to nsrauction@vistomail.com.

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History of the Nu Network (Feedback Please)
#2
#3

is there a minimum price for NSR, as a mechanism to defend against (very) low bids combined with low participation?
I don’t want shareholders to risk the marketcap by having someone buying up very large amounts for ridiculous price and dropping it on the market on day 1.

I propose we set minimum price bid to 70% market price.

1 Like
#4

Shouldn’t a bid contain the identity of the bidder to pass #7 ?

#5

This. It is completely impossible to ensure (4) and (7) without revealing the personal identity. I addressed it earlier but gave up asking how this should be achieved. With all these unanswered questions I have to say that the auction looks a bit shady.

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#6

Seems a bit shady and out of the blue indeed.

#7

Of course. You have to be identified as a business partner.

Not a bad idea, but if I change the rules after the auction starts, it could lead to charges of unfairness. Therefore, any changes should be handled via shareholder motion. That way I’m not open to criticism for changes.

#8

What are the criteria for being a business partner and how are these criteria evaluated?

#9

Previous sale of the initial distribution had set rates that increased as time went on. There’s still many NSR that needs to be distributed. If we continued with the existing approach @JordanLee would continue selling blocks of NSR above current market rate. I’m honestly surprised to see such negativity towards the idea of an auction for a portion of the remaining distribution. Jordan had presented the idea to the team prior to making a forum post and we thought it was a fair way to go about continuing distribution. With the intent that people (from the community especially) could have an opportunity to purchase some of the remaining NSR at a price they’re comfortable with.

If there’s any concerns with the terms then let’s discuss a modified approach and pass a motion to proceed. Calling it shady is really off base. I don’t see anything involved in the post that’s too different from the existing process other than an auction approach (and the terms to facilitate that) rather than a fixed rate.

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#10

From Jordan’s original Undistributed NSR thread:

I’m somewhat surprised that this auction seems to be troubling a few people. The only major difference I see between it and the original “undistributed NSR” thread is that a large bulk is being sold at the highest bidded price, rather than an artificial value like before. This approach will ultimately reduce the administrative time Jordan Lee spends on handling share purchase, freeing him up to focus on actual development work.

And for the record, if someone wants to advance a motion specifying that there should be a price floor in place for the auction, I would support it.

#11

Great minds think alike :stuck_out_tongue:

#12

@creon you qualify for NuShare purchase based on the valuable NuShare related research you have published and the problems you have helped us work through.

#13

Yes, my apologies for that @JordanLee. I am still not completely sure how this filter on the bidders will be applied, but I am no opponent to the idea and agree that it is a very fair way to distribute the remaining shares if executed correctly (which I totally assume will be the case).

This is very nice, thank you. But I will probably use my crypto capital to support custodian pools instead. Are you making these decisions in your team? I strongly believe your judgement, but it would be good to know that several opinions will be considered when business partners are selected.

1 Like
#14

Bidders would probably be interested in the “balance sheet” of Nu. Is it possible to get recent data on the following?

  • Total NBT parked
  • Total NBT held by KTm, Jmiller, and Jordan (tiers 1 to 4)
  • Total “outstanding” NBT (not held by KTm, Jmiller, or Jordan)

Are these metrics publicly available? Thanks!

#15

I’m also not against this idea but I’m a bit worried about that we might not get enough participants for the auction to play out well. The 70% market price idea seems like a good defence mechanism.

1 Like
#16

Thought experiment: If Jordan put 100M NSR for sale on an exchange at 70% the current market price, how much of it would sell at that price?

#17

Total parked NBT can be found by anyone at any time using the getinfo RPC with NuBits selected on the Unit menu:

“totalparked” : 35963.8374,

There are plans and preparations being made to make the answers to your other questions publicly available in real time. I know a reporting tool is being developed for this purpose. The motion to end holding of shareholder funds by KTm and Jamie will also bring clarity. For now, I can tell you I have 538,000 NBT. If @KTm and @jmiller report their totals the outstanding NBT can be derived as the total blockchain NBT minus each reported total, minus the 4 million strategic reserve, minus parked funds

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#18

About the 1B NuShares that will outstand eventually.
In the future, shareholders will be able to vote and create new shares.
What’s a plausible plan for the total NSR outstanding in 2016? 2017?

#19

That is completely up to shareholders, as they will approve all NSR grants. What they decide will be heavily influenced by changes in the level of demand for NuBits. When NuBit demand is in decline as it has been in recent weeks, they will be inclined to create additional NSR to support the peg and development. Conversely, when NuBit demand is rising, I hope to see sell side LPCs granted NuBits who pledge to use proceeds to buy NSR and burn it. So NSR supply can decline in the future.

The fate of nearly 200 million undistributed NSR is currently unclear. There is a motion currently on track to pass that mandates the burning of undistributed NSR 60 days after the protocol change allowing NSR grants. Therefore, all we know is that a little more than 700 million NSR are outstanding and an additional 100 million will be auctioned. The other nearly 200 million may be burned or distributed depending on the needs of the network and the passage of the motion.

1 Like
#20

@Chronos:

Here is my response to your query regarding my currently held NBT funds.

"fundsReserve":[
    {
        "address":"BFYzuakJCgyU7vsQY485ipC4aFtKVamF2m",
        "amount":54999.9,
        "currency":"nbt",
        "notes":"Adjustment of active liquidity on the NBT/BTC pair to protect grant funds devaluation losses",
        "source":"Liquidity adjustment from CCEDK NBT/BTC market"
    },
    {
        "address":"BSyDq6yQ3vt2URGcBhJRmAdsNuQ5pXkAsx",
        "amount":225260.7696,
        "currency":"nbt",
        "notes":"Now that coin control has been included, I moved the grant's reserve funds to unique addresses. It will be easier to keep track of incoming and outgoing transactions. This also allows me to split the reserve into multiple blocks for enhanced security.",
        "source":"Grant Reserve Address #1"
    },
    {
        "address":"BB4BUgf8PqfcG6tryUATV3QiLdwyejaQcZ",
        "amount":237630.3948,
        "currency":"nbt",
        "notes":"",
        "source":"Grant Reserve Address #3"
    },
    {
        "address":"BCCB8roJPNCNGzkzC5hasVGVAYtKB9i9C4",
        "amount":237630.3948,
        "currency":"nbt",
        "notes":"",
        "source":"Grant Reserve Address #4"
    },
    {
        "address":"BBoyA8PdVNHCzWRXJcudqYf3SQATgHDcMi",
        "amount":237630.3648,
        "currency":"nbt",
        "notes":"",
        "source":"Grant Reserve Address #5"
    },
    {
        "address":"B5MYXodipcHZB74UsQzi7oVS4bqtndWUCn",
        "amount": 29886.83,
        "currency":"nbt",
        "notes":"",
        "source":"Temporary withdrawal from CCEDK BTC liquidity account for balancing and account adjustment"
    }
]

Total held off exchange: 1,023,038.654 NBT

"exchangeHeld":[
    {
        "amount": 30700,
        "currency":"nbt",
        "notes":"ccedk - nbt/ppc trading account; not active while account adjustments are being made"
    },
    {
        "amount": 33900,
        "currency":"nbt",
        "notes":"ccedk - nbt/usd trading account; not active while account adjustments are being made"
    },
    {
        "amount": 22600,
        "currency":"nbt",
        "notes":"ccedk - nbt/eur trading account; not active while account adjustments are being made"
    }
]

Total on exchange: 87,200 NBT

Funds not considered in the holdings listed above:

  • ~72,000 NBT from Excoin (status: treating as a permanent loss until the situation is clarified and the funds are recovered).
  • ~350,000 NBT sent to @jmiller as part of the approved liquidity transfer motion.
  • 70,000 NBT distributed in the form of PPC as dividends previously.

//KTm

2 Likes
[Passed] Motion to end LPC operations of KTm, Jamie and NSR sales of Jordan
Current Liquidity