I think it was pointed out somewhere that the reported liquidity is only for the tier 1, which is subjected to the strategy and algorithm used by the LPC. It changes rapidly according to market condition and should not be used as a macro economy indicator. We should put this in the FAQ.
I think you are right, but I have no visibility to Tier 2 liquidity, so until a custodian moves liquidity from tier 2 to tier 1 or someone shows liquidity in tier 2 I can’t do anything else than continue to vote for low short term interest rates.
I agree it is a problem.
It is time to offer parking rates.
I disagree, @peerchemist. It’s not time to offer parking rates.
From a strategical point of view, it would be wise to wait until NBT burning has been implemented to the protocol before park rate interest gets voted for.
Until then we should rely on Tier 2, Tier 3 and Tier 4 liquidity before we consider proceeding to Tier 5.
I agree that it’s not convenient to have only information about Tier 1 liquidity.
But as providing liquidity information of subsequent liquidity Tiers is already on the NuBot development roadmap, I recommend to wait for that and focus on promoting LPCs instead!
Until we can actually see Tier 2, 3 and 4 liquidity, I’m sure the current custodians will let us know if there are any buy side problems. We can then raise interest rates if that’s the case. Once we can see these additional tiers, shareholders will be able to make more informed decisions.
Tier 1 is shifting rapidly. Don’t overrate snap-shots.
@assistant liquidity please
The assistant seems to have closing time. I favor good working conditions and decided to have a look at the wallet myself; here’s what it displays:
“buy” : 130841.934,
“sell” : 259414.2712
The current Liquidity in the Nu network is:
189087 NBT on the sell side and 218251 NBT on the buy side.
apologies, my fault. I’ve been working on the motion/custodian proposal hashing and verification.
I wanted to give an update regarding tier 4 liquidity, as it has important implications for park rate voting. I have exchanged a lot of tier 4 liquidity for NuBits in recent days and now have 531,000 NBT in my possession. This means the number of PPC and BTC I hold as tier 4 buy side liquidity has been considerably depleted. I presently hold 85,000 PPC and 81 BTC as available tier 4 liquidity.
There is now 80,000 in buy side liquidity being reported by the client. It is not clear to me whether this includes all tier 2 liquidity at this point in time as that has been in transition in recent days. Clarification from LPCs and the NuBot team would be helpful. Tier 3 liquidity is not yet automated and as far as I know there is nothing there.
Many NuBit holders have recently sold, presumably to hold BTC in the hopes that the bottom is in. As a result, total liquidity in tier 1 through 4 is lower than it has ever been.
I will leave it up to individual shareholders and group discussion as to whether the situation warrants voting for parking rates. Be aware that the protocol presently limits park rate increases to 1% per day. So, if shareholders voted to raise park rates from 0% to 5% it would take four days to rise to that level. This daily increase limit is too restrictive and is being raised to 3% per day, but that will not be implemented until the 0.6.0 release.
Shareholders have passed a motion (bda115840291067ba0814032f0c93d4d5900a5cf in block 183,809) for currency burning where the intent is to back the peg with the value of the NuShare market cap by creating and selling NuShares as needed in exchange for NuBits, which are then burned. This is not implemented yet (due in the 0.6.0 release), but it can be simulated using the undistributed NuShares I hold. I understand such action to be consistent with the will of shareholders as expressed in this passed motion. If there proves to be controversy regarding this point, I would be willing to reconsider that assessment. It is my intent to be subordinate to the will of shareholders, but the appropriate time window for action is shorter than the time required to pass a motion. As a result, already passed motions will be the primary basis for my interpretation of shareholder will, supplemented by my understanding of shareholder interests, comments in this forum and the preliminary results of any proposed motion. Specifically, if someone advanced a motion suggesting a different course of action and there were majority support for it in the first couple days of voting, I would cease activity contraindicated by that motion in the days required to finally and formally receive approval. Subject to the qualifications just described, if total buy side liquidity in tiers 1 through 4 drops below 100,000 NBT, I will sell NuShares to approved purchasers at the market price evident at the time of sale to protect the NuBit peg. Please contact me by Bitmessage at BM-2cXS5ezep1jUqeu8CwC6M4aTmMSxcFEHNN if you are interested in purchasing. Accordingly I will use proceeds from these sales to purchase NuBits, which will then be burned. I will be advancing a motion to burn all NuBits that I hold in excess of 250,000 shortly.
Regarding the question of whether to support the peg with interest rates, tapping the market cap or both, I believe both will prove to be the most effective approach.
Soon I will be advancing a motion that will reduce the probability of needing to support the peg with interest rates in the future. I will present an important method for peg support that has never been discussed here and propose an end to speculative activity with shareholder funds, which has been an important factor in leading us to this place where we are considering offering interest rates.
That is a lot of NBTs and I assume that this exchange was done to compensate the lack of custodians we have right now.
Confidence in this being an appropriate way to deal with the situation until burning has been implemented might only be created by a motion that deals with this intermediate concept.
To state my opinion about that as part of the discussion:
I highly welcome this way to resemble the “official” burning mechanism until it’s part of the protocol.
That sounds like a a great plan to me! And I hope that I’m not alone with that impression.
I’m so happy about the fetch-ahead version of burning, because I think offering park rate interest could send the wrong signal.
I’m aware of the multi tier liquidity model and I know that park rates (tier 5) come before burning (tier 6).
As Nu is still young and NuBits a very young product as well that has not very much adoption and widespread confidence yet, I think burning might send the better signal.
It would show that NuShares holders are willing to protect the peg by all means.
In the eyes of critics parking rates don’t come at a cost for the NSR holders (short-term) and are a reason for name-calling (Ponzi…).
By actually using the burning instead of parking rates this would undermine the reasons for name-calling and show that statements about 0 reserve and the peg being ultimately protected by the value of the NSR would not be pithy sayings but a fact.
Just my 2 cents…
To me the arguments if parking or burning is the correct method all sound kind of vague. From my understanding parking should be applied if the NBT supply is temporarily too large, with a mid-term perspective that the market will rebalance. On the other hand I see burning as a mechanism to be used when the supply is generally too large, even in long-term perspective.
So what is the present case? Reading
makes me believe that the low NBT demand is a temporary problem. But its speculation at this point, and we should think about tools and measurements to determine what exactly should be done in a particular situation.
Mh. I always thought emitting NBT through parking is used to counter a shortage of NBT on the market through inflation at a “later” point (end of parking period.)
I also though burning NBT would be the counterpart, which destroys available NBT on the market, when there is a lack of demand and thus oversupply.
Right, haven’t thought about this very powerful application of parking. But do you say that parking should actually not even be considered as a method to counteract oversupply?
The original intent is to counteract oversupply. I believe that’s what is in the whitepaper. Parking is a very flexible feature which can impact the network in various ways. It could also be used to quickly introduce new supply since the minimum park time is one minute. We’re also talking about allowing people to park without park rates available to emulate the “freezecoin”/“proof-of-park” idea mentioned on this post.
Parking is flexible, and will become more flexible. i think our auction/burn system for NSR will prove to have a strong impact in various ways to the network as well when it’s implemented.
When demand for NuBits is in decline, shareholders will vote to offer interest for parked NuBits. Shareholders
will offer enough interest to create enough demand for NuBits to support the price at one USD.
Yes, I may have misunderstood. The white paper indeed seems to intend that a direct monetary incentive ($$$ at the end of the parking period) will increase demand for NBT and thus will cope with oversupply.
I think @CoinGame just gave a short overview on how parking can affect our supply. I can’t argue with that.
Jordan, thank you for this informative post.
If an insufficient quantity of qualified buyers contact you, would you consider selling undistributed NSR on a public exchange for this purpose? If so, would you notify shareholders before doing so?
I suspect this would not comply with Jordan’s vision of distributing NSR to only pre-approved purchasers as “business partners”. Selling undistributed NSR on a public exchange is venturing into securities territory.