Park Rate Voting

[cryptog]

I have exchanged a lot of tier 4 liquidity for NuBits in recent days and now have 531,000 NBT in my possession

That is a lot of NBTs and I assume that this exchange was done to compensate the lack of custodians we have right now.

[masterOfDisaster]

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.

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.

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.

That sounds like a a great plan to me! And I hope that I’m not alone with that impression.

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.

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…

[creon]

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

Many NuBit holders have recently sold, presumably to hold BTC in the hopes that the bottom is in.

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.

[willy]

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.

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.

[creon]

parking is used to counter a shortage of NBT on the market through inflation at a “later” point

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?

[CoinGame]

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.

[willy]

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.

But do you say that parking should actually not even be considered as a method to counteract oversupply?

I think @CoinGame just gave a short overview on how parking can affect our supply. I can’t argue with that.

[Chronos]

Jordan, thank you for this informative post.

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.

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?

[tomjoad]

If an insufficient quantity of qualified buyers contact you, would you consider selling undistributed NSR on a public exchange for this purpose?

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.

[desrever]

[quote=“JordanLee, post:41, topic:161”]
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.[/quote]

It is still in a transitory state, we are testing 0.1.5 which now reached 9 release candidate level. Expect more stability soon, where both liquidity tier 1 and 2 will be reported in the client

[cryptog]

I have exchanged a lot of tier 4 liquidity for NuBits in recent days and now have 531,000 NBT in my possession.

. I will be advancing a motion to burn all NuBits that I hold in excess of 250,000 shortly.

Does it mean that JL intends to burn 281,000 NBT? I do not think so.
Apparently, the NBT in excess of 250k intended to be burnt need to come from the sales of NSR as indicated below:

Accordingly I will use proceeds from these sales to purchase NuBits, which will then be burned.

Is my understanding correct?

[Ben]

I believe Jordan Lee directly implies that there is a good chance that ~300k worth of NBT will be permanently removed from circulation.

Liquidity has been added to the system to balance the walls. I don’t know the details, but I suspect that at least some of the funds used to support the “buy side” came from NSR transactions.

[cryptog]

, but I suspect that at least some of the funds used to support the “buy side” came from NSR transactions.

I think you are right.

I have exchanged a lot of tier 4 liquidity for NuBits

and [quote=“JordanLee, post:1, topic:618”]
Tier 4This liquidity can be provided by custodians not dedicated to liquidity operations. A present example are the proceeds of NuShare sales
[/quote]

[cryptog]

good chance that ~300k worth of NBT will be permanently removed from circulation

But what I don t get is why we would need to burn those 300k NBT right now?
Why not just parking them?
Or we are in an emergency situation?

[masterOfDisaster]

Because of the signal?
Parking seems to be more appropriate in a situation with bigger NBT adoption.
Burning now (instead of parking) is a signal that keeping the peg is of paramount importance.

[cryptog]

Because of the signal?

In that case, I would like to get some clarifications on the objective information used by Jordan Lee that led him to decide whether or not to burn a large quantity of NSRs.

[masterOfDisaster]

burn a large quantity of NSRs

As far as I understood this idea of @JordanLee, NBT are considered to be burned to reduce the NBT supply.
This is not according to the standard process which is to be implemented with release version 0.6.0 (which would create NSR by burning NBT).
And that’s the reason why there needs to be at least a discussion about that and maybe even a motion.
I can only welcome the idea like I verbosely explained a few posts above.

[mhps]

Burning nubits with good reason is certainly a milestone event. That will shut up a lot of nay-sayers and gain believers. I haven’t gotten all the fine points in the OP but I feel it’s important to show that it is evident that this particular burn is needed.

Make it a public event (like, everyone can watch it) for best PR effect.

[cryptog]

t it is evident that this particular burn is needed.

I strongly second that.

[crypto_coiner]

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.

How so? and to which extent is it approved and monitored by shareholders?