NuShare on centralized exchanges

[towel]

Let’s say that we have a very popular exchange where NuShares are being traded. The liquidity is ultra deep - kind of like peercoins on btc-e or how many bitcoins existed on mtgox. Err… scratch the last part there. Anyway, now let’s presume there is enough liquidity on the exchange for the exchange to mint new NuShares and also participate in the voting process. Since the exchange makes money from volatility (people love to trade when its volatile) and since the exchange actually doesn’t own any NuShares and hence don’t suffer if price would go down (on the contrary they stand to benefit from high volume trading), now what incentive do they have to make the kind of vote that is best for the system? Could it be that their incentive is to reduce dual side custodian liquidity, create new NBT’s and profit from dividends?

Probably I’m wrong though. I spend most of my time being wrong.

[Chronos]

You’re misinformed. NuShares can only be minted by NuShares. Voting can only be done by NuShares. If an exchange “doesn’t actually own any NuShares” then it also doesn’t have any weight in voting or minting.

Only NSR mints, not NBT.

[towel]

That’s very good to hear. I had got it wrong it seems. Just to be clear, can NuShares be traded on an exchange and if the exchange have the NuShares in their possession is there a technical reason that makes it impossible for them to vote?

EDIT: By the way, I really appreciate that you bother replying to my posts and helping me better understand how NuBits works.

[Chronos]

Ah, I had misunderstood. David is correct. Yes, this is yet another potential risk of centralized exchanges. It is not a weakness of NuShares protocol, per se, because decentralized NuShares trading would not have this issue.

[towel]

because decentralized NuShares trading would not have this issue

Yes this exactly what I was getting at. Since NBT is perfect for trading on decentralized exchanges, we could create a decentralized exchange with low fees that, because of the low fees, could compete with other exchanges and bring great liquidity for both peercoins (centralized exchange minting) and NuShares (what I wrote about above). That way we could solve two issues at one stroke.

People could be holding NBT on this exchange without volatility risk, which is kind of the only point (for me at least) to hold USD at a centralized exchange (and I keep that position small, thinking that they will gox me at anytime).

[rodchi]

Hi everyone! I’ve been reading these postings trying to learn about Nushares. It seems to me that there needs to be a way to buy Nushares directly from the client program. Am I right on this? It seems that I could use the client to search the network and find people selling Nushares. It could even be completely anonymous where you have now idea what wallet address you bought the Nushares from.

So if I have $100 Nubits on the Nubit side of my client program, I should be able to search the network, find people who are selling Nushares, and do a swap. The client would handle the exchange rate, and ensure that both sides send their part of the bargain. This shouldn’t be very difficult to code I would think.And it would be the first crypto-currency with a built in exchange process.

[Indigoman]

I’m working on a project at university that might provide an exchanging mechanism that could be prove useful for NSR trading. In essence, there wouldn’t be a way for the exchange we’re creating to vote in the Nushares network by design and that can be audited by the public. I’m holding off on the details of the project to keep our competitive edge. But i’m very much excited about the Nu movement and have always been a supporter of Peercoin. Looking forward to providing our services to the public when the project is done. Note though that the project is a university course project so when provided it will start by supporting only the test network to provide a proof of concept and gradually we’ll start inviting traders to test the system on real markets. I hope the Nubit community would be interested in testing our system as I feel it would provide a nice neiche

[CoinGame]

sounds interesting keep us posted.