In this case, i.e. if the park rates are fixed and don’t change, both methods will result in the same payout.
Let’s instead assume the current park rate for 3 months is 2.5%, and after 1 month shareholders suddenly decide to raise it to 5% (i know this cannot be in one block, but for the example its fine) and after another month they suddenly decrease it again to 2.5%. So everyone who parked in the right window, will get 5% as payout, will everyone who started to park outside the window will get 2.5%, correct?
In my proposed method all people who parked before the latest decrease (2 months in the example) and at most 3 months before the increase, will get 5% and all who came later will get 2.5%.
Yes I think your description of the current system is correct. Of course the proposed method could increase Nu’s liability but it also increases parking early on, because you don’t have to ask yourself anymore if its the optimal time right now to start. If the park rate now is fair enough, then park now, you can only get more or the same. This may reduce the target park rate we have to offer.
I’d also like to stress again that the targeted people to park their nubits (so far) are not high class economy wall street people who know the game and the rules with all its details, but regular cryptocurrency users who want to take an offer that is hopefully easy to understand.
It would change the game for sure. Since it can only increase the amount paid and not decrease from the current model all things equal, park rates would by necessity be lower. However, the real question is if we say that the amount Nu pays total in a given time period for parked nubits is held constant, does your method increase the number of parked nbt? I know that’s a hard question to answer, but if the answer is no then it is not a better model.
These are the types of people setting the park rates. If we were more logical about our chosen park rates I don’t think any of this would be an issue.
I think people have two fixpoints in their acting: One parking rate where they actually would be willing to park, and one parking rate where they immediately would park. I.e. maybe I am willing to park my NBT for 1% per year, but I’ll wait to see how high it goes. However, at some point I either speculate on an upcoming decrease and park or its just such a large interest rate that I don’t care if there is more to get.
In the current system people will always tend to wait, while the max interest system will merge both fixpoints such that in the moment where you are willing to park, your decision should also be to park. So I could imagine that we will need a smaller parking rate to encourage the same amount of parked NBT (i.e. we can attract more parked NBT using the same parking rate).
I didn’t want to muck Cryptog’s feed thread up, but I think this rate progression should be flipped when decreasing rates. I.e. longer periods should be valued less than shorter bins if you think we have reestablished the peg.
I personally don’t like the NSR dive and would be burning NSR for NBT right about now to take advantage of those park rates if such a thing were possible. What I’m saying is, I don’t think we’re out of the deep water yet.
People are responding to the NSR price. We should keep the park rates as they are and burn NSR for NBT, in my opinion.
But that conflicts with the auction, so it gets confusing. This is why we need decentralized burning.
If we aren’t burning, I agree we should reduce park rates and just deal with the low NSR price.
As a side note, is it possible to provably park? It would be interesting to have a motion like: Buy NSR > Burn for NBT > Park such that we successfully kick a portion of the problem down the road until we have a chance to develop and grow.
For reference, I just changed my numbers, because I don’t think we’re going to get a good burn mechanism soon. I’m currently going 10% for 11.4 days, decreasing linearly (quadratically in time) to 8% at 6 months and sharply dropping off from there down to 2.5% for 4 years.
I don’t see any argument that could be articulated against raising rates right now, and the same is true over the last couple weeks.
Park rates have been consistently underutilized as our a method for maintaining the peg, which has placed the peg at unnecessary risk. It is definitely suboptimal to wait until most liquidity is gone to take action. That risks panic, erodes confidence and wastes resources. Shareholders should be constantly aiming to keep liquidity centered. It has been a mistake to not raise rates until liquidity is centered and balanced. The high cost of liquidity right now means there isn’t nearly as much of it as is desirable. This means what is there must be carefully maintained. Due to low levels of NuBit trading the volatility in the balance of the walls has been low. Liquidity being off center is only acceptable if it is short term (hours or a few days at most) volatility. If the average over weeks is off center, it indicates shareholder mismanagement.
Perhaps shareholders have been unaware that most liquidity is on the EUR/NBT and USD/NBT pairs on CCEDK. There has been very little on the BTC pairs for an extended period.
Those of you voting to keep rates the same or lower, would you share why please?
There seems to be some selling pressure on NBT (or some rush to buy BTC), and the buy side has shrinked. One thing I can agree about decreasing park rates is to do that conservatively, in an experimental fashion.
If park rates remain in effect for a long period of time, it simply means rates should be knocked down with an NSR sale combined with an NBT burn. An auction is in progress, but it is important to continue using park rates until that is complete.
Can you elaborate on that? What auction is in progress that will burn NBT?
I personally see no incentive from the shareholders to burn NBT currently, most even argued that they would not print NSR below market value. So parking would be the only option, but I am also hesitating and think if the buy side drops even more, maybe shareholders will panic and let a NBT burn grant pass, which would be in my interest.
He’s referring to the B&C auction. I think he just means that we can’t do a NuShares sale and NuBits burn currently because an auction is already in progress and that could interfere with it, so it’s suggested that we continue using park rates instead until a better time comes along that this can be done.