Roughly starting from here there were discussion about increased spread for 3-4 days. You actually started the discussion from a post somewhere before the one in the link. I would like to hear what you think.
Related to spread, there is a question directly to you regarding potential PEGs that would want to buy Nubits from the reserve fund. Could you please answer it (in that thread) ?
At risk of pulling the thread off topic, I think experimentation with spreads is healthy to see how the market reacts. Wider spreads lower the quality of our product, but it also lowers or eliminates the cost of liquidity. I hope to see people offer NuBits at payment processors without shareholder compensation at spreads that are profitable without additional compensation.
Various spread systems which encourage buy support, volume dependent transaction fees, trustless NSR burning without grants, or a different dividend system that encourages holding the share continuously are just some examples. We need your expertise when discussing those topics, since you are by far the person with the most knowledge about these systems. There are many interesting discussions about revenue models and buy incentives and everyone would love to hear your opinion on the technichal feasibility and economical aspects.
And I am saying for weeks that I am not convinced by the sustainability of the peg with our current strategy and I even wanted an NSR sale if the B&C auction would have been successful. This is the reason why I don’t want to be an LPC right now, and other LPCs might get to the same result in their calculations. With my wish to dilute NSR to destroy NBT I am certainly not speaking for all other shareholders here, and to my surprise this is the first time here in this thread that I see others who also want to reduce the liability first before providing people with an offer to lock up NBT.
And we don’t need a motion for this. We need someone who applies for a NSR grant and simply burns NBT in exchange. There is no need to make a blind auction here. If NSR grants are still not avilable (I guess they will be soon when looking at the tracker), you could simulate it by sending the NSR to the grant recipient who then applies for an 1 NBT grant.
I am happy (maybe together with @Ben) to create a template NSR grant proposal with an explanation how to burn NBT and how to proof it afterwards. We also should make a price recommendation, I guess something around the 0.2 cents you proposed in your auction would be a good starting point.
EDIT: And maybe just to calm people down: My park rate configuration won’t have much effect on the overall park rates. I bought all my NSR from the open market and I am not a rich person. My posts here in this forum surely have a much larger staking weight than my coins.
Right. I made a mistake between additional parked nubits and already parked nubits.
A possible scenario (the one that you have probably in mind):
By the way, i have currently put my 3m rate to 17%.
Grudgingly I have increased the park rates in my datafeed as any other actions will take a bit of time. However we should start burning before the premium on it will be too high (or no one is interested) and consequently rates will need to be increased even further. I consider rates for longer than a few weeks on or above 10% not healthy at all. I recognise that we have a challenging situation with a failed auction and another auction which will continue to hold the NSR price which is also our leverage, hostage. Will support this burn proposal by @nagalim when turned into a motion or any similar proposal when presented for voting.
My new rates will be:
7.5% for 22.8 days (still encouraging longer terms)
10% for 1.5 Months
10% for 3 months
7.5% for 6 months
25,000 additionally parked NBT will not directly translate into a reduced sell side liquidity of 25k and even less translates into an increased buy side liquidity of 25k, since also people who would hold their NBT anyway are incentivised to park their NBT. So its only a part of the newly parked NBT that will add up on the buy side liquidity.
A calculable method would be great. Our target is to increase the buy side liquidity by 25k over the next three months using a one time action now (parking/burn). This would correspond to printing 10 million NSR assuming we could sell them at 0.25 cent. So even if we do not get this price, it will be something around 15 million NSR. That’s pretty calculable.
And parking? We don’t have any data. Before making any statement about the effect a 1% parking rate increase has on the amount of parked NBT, given the current liquidity, we need to parse the blockchain for this information. Do we already have scripts for that? We ideally need a visualization of the parking rates and the amount of parked NBT over time. Then we can make an estimate what kind of interest rate increase we need to offer to encourage our 25k target for three months.
As mentioned earlier, if we add 10k right now through a NSR sale then adding the other 15k through parking rates will be much easier, because people see an offer they are willing to take considering the current liquidity. Nobody wants to park 10,000 NBT for 3 months if the current buy side liquidity is close to nothing.
You seem to ignore those who buy into NBT just to park it for the interest – the carry traders.
You are right. We need charts to show park rates and the amount of nubits being parked.
I’m not ignoring them I just say that parked NBT > bought NBT. Of course we want to address the people you are describing with our offer.
Agreed
I see that auction motions don’t usually state some specifics that decide things like starting bid / reserve prices. People may agree with an auction but disagree with some pricing issues. Would it be good practice to include some pricing constraints in auction motions?
[quote=“creon”]Nobody wants to park 10,000 NBT for 3 months if the current buy side liquidity is close to nothing.
[/quote]
Yes, if shareholders don’t use the tools at their disposal to balance liquidity then they must pay more for liquidity to compensate for the extra risk.
What is needed now is a broad recognition and acknowledgement that shareholders have in fact mismanaged liquidity in recent weeks. We know this because liquidity remained unbalanced while rates remained flat.
Our market cap is dropping right now. It is a painful reminder that the system is working exactly as designed: When shareholders refuse to provide robust liquidity and peg support, they lose equity.
I will be advancing a motion shortly for a very quick NSR sale and NBT burn to compensate for the recent shareholder mismanagement of park rates.
@Nagalim almost completed a very appealing motion for this here: [Voting] NBT burn / NSR sale
Since no more comments were made in this thread I would suggest to hash it so we can get this done.
Buy side is 27k and sell side is 71k, liquidity wise. More and more unbalanced although rates are high.
We need to buy back and burn nbt by selling nsrs otherwise the peg will be endangered.
Whenever BTC prices goes up people dump NBT into the buy wall. The fundamental way to avoid buy side’s being close to zero is not letting hedging (of BTC/USD price) dominate NBT volume. For example mostly offering NBT/fiat and capping NBT/BTC, and selling most NBT through PEGs.
If we let hedging dominate NBT volume, we will have to operate (such as auction and move NBT in and out of parking) as quickly as BTC price changes, forever. Such frequent operation adds risk and cost.
I see it with a slightly different perspective. We only need to protect our buy side liquidity from hedging and volatility, our sell side is protected by the very nature of the peg. This is why we should channel buy side liquidity to fiat pairs and sell side to crypto pairs. Fiat pairs should have a smaller sell target and crypto pairs should have a smaller buy side target.
Setting strategic target as above is what you mean by “channeling”, right?
This is a use case for a shorter motion voting period.
The drop in buy side support is likely due to the payment of contractors yesterday. A transition is underway to decentralized compensation for work with twice monthly payments dropping to ~5,000 NBT in 60 days. In the meantime, there is 2.0 and parametric order books to finish. However, each twice monthly payment should be less than the one before (for the next three or four periods) as we move toward the decentralized development model @Cybnate has employed.
This is delicate. It’s more of a marketing strategy, then adjusting the targets to fit the participation level rather than trying to force the market one way or another.
Basically, we instill a philosophy: fiat buy order is low risk profitability in return for real liquidity provision. Crypto sell order is compensated high risk bets on individual coins in return for network volume and exposure. If you think about it, it not only makes sense, it is what we are already doing. We just don’t have the fiat pairs yet.
If you have fiat, why not profit off it in a liquidity pool while you hold it? If you have nbt, maybe aim for the higher compensation on your favorite coin that you think will go up long term. If you have crypto, try to sell at a great price for fiat so you can run the loop again.
The issue is that we are not only paying for btc volatility right now, we’re also paying people a lot to hold btc on buy walls. That is a huge gamble. Let them hold their non-nbt liquidity in fiat pools instead and pay them way less.
By the way, how do you foresee your role when Nu has adopted a fully decentralized development configuration?