Yes, FED can exploit the whole world by manipulating the USD because they can print USD from thin air or increase interest to expand or shrink liquidity. USD is the biggest pool on this planet.
However, the smaller pools such as mexico and argentina peso has NO such advanatge, they can not print USD when hot money flee from these countres, thus peg failure.
Can you imagine argentina peso attack USD in the same way? No way! FED (USA) has no foreign exchange reserve at all! When foreign money wanna enter USA, just finish the transfer within foreign countries. USA has no obligation of transfer USD into Peso when argentina money flee USA, therefore, USA has no worry about insufficient peso at all. And don’t worry about the less liquidity at all because they can print USD as wish! That’s God Mode!
It seems that you misunderstand the currencies between being pegged and pegging others.
If Nu can print BTC, of course, the peg is always maintained!
And because they sometimes print to much and it can’t be “backed” by the current domestic economy alone, they need economical assaults like TTIP if hyperinflation shall be posponed.
Just because something works now, doesn’t mean its design is ideal and can’t be improved.
The Romans reigned for a long time and finally failed - because the design of their society and economy didn’t work longer.
Just caring about now and not thinking about the future is often feasting in future generations.
That’s why there are so many nuclear power plants - the produce “cheap” electricity now. Caring for the nuclear waste is a job for the future generations and oh, it will only take hundreds of thousands of years until that nuclear waste is harmless.
I could go on with so much more, e.g. fossil fuels, genetically modified organisms, etc. all of them offer potential now, but may have significant drawbacks in the future.
Why am I writing all this crazy stuff the seems partially unrelated to Nu?
I see Nu as a way trying to make the world a bit better. If I sense improvement of this way, I need to point that out and try to convince others to test that way.
Nu can act responsible and not only in terms of its shareholders now and in the next years.
If it’s done right, it might even pay out more than otherwise.
I don’t want to feast on future generations; not more than I already do. I try to make it less.
That is why there is a voting mechanism for Nu. If, for some reason the peg needs to be changed, there can be a vote where to peg it to. I am not saying that there needs to be a change, but if it does, then there is a way forward.
So the big seller of nbt that sold yesterday might have sold after unparking.
It seems that http://nuexplorer.ddns.net/charts/parked is accurate.
The next big unparking would be made in 1 month from now, at a 50k nbt rate.
With current situation why don’t we raise park rates a good notch higher?
Let me explain what is a good notch. If people are speculating that BTC will appreciate 30% in a month with 50% confidence, then to attract the speculators you’d promise a better risk-adjusted-rate (> 30%x50% = 15% per mo).
With this reasoning in mind, if we suppose BTc will reach $675 (high point of 2014 Apri) in a month with 30% confidence, then it is 23% gain in a month at 30% probability. An equal risk-adjusted-park-rate would be 7.7% per mo and 90% pa.
I think if we just offer half of that to attract a fraction of traders to sell btc to buy nbt to park, for maximum period of a month, it would be good. (Note we are paying liquidity providers 7% per mo for have 0-buyside peg!)
So please support a 50% pa park rate for 5.5day 11.2day 22.3day. It’s a very good deal for Nu.
US-Nubits is a cryptocurrency whose price is pegged to the USD. As part of its pegging operations, when BTC price rises, Nu uses “parking” to rein in extra US-Nubits on the market and pay park rates as interest.
Now you have a chance to lend your bitcoin with very good rates to Nu by buying US-Nubits and park them. Return for different park periods are
Park Period | Return
5.6 days | 0.27%
11.2 days | 0.62%
22.4 days | 1.38%
45 days | 2.77%
90 days | 6.4%
Just buy Nubits, park them (do it in your wallet), and the “interest” will be paid by the blockchain at the end of the period. Park now if you are interested as when BTC price starts to fall, high park rate will disappear. Once you park, your rate is fixed.
You can buy Nubits here (most liquid exchanges are poloniex and the NuLagoon Tube).
Regarding the parking rates in general and having a look at them as an isolated mechanism of the Nu network, do I understand them correctly if I describe it as:
Parking rates improve the situation today, but worsen it tomorrow even further due to interest rates to be paid out
Parking rates sustainably improve the state of the network
both is wrong and somebody please explain me the reason for parking rates.
You may well assume that I do have an academic background and am familiar with interest rates
But maybe it helps if I tell you that I would never consider to buy and park Nubits currently because of the dire situation of the network. Why would I care for say 3% interest for a short period of time if high interest rates offered by the network are positively correlated with the financial distress the network faces?
And while some here say that 50% APR sounds unsustainable, I totally disagree with that. Why? Because it does not sound unsustainable, it definitively IS unsustainable.
Maybe I get this mechanism totally wrong and it can’t be approached with the knowledge I have or with normal intuition towards interest rates. I just think of a bank that is in the news because it has financial trouble and at the same time I receive an advertisement letter from them asking for my money in return for record high interest rates.The only thing they would get from me would be a sarcastic smile.
I am both a rather big Nushare- and Blockshareholder and I am not considering to jump ship because I don’t have to. But at the same time I must admit that I do lack knowledge about the underlying mechanisms of my own investment, certainly because I lack the time to frequently catch up on the stuff going on here. I will change that.
That’s a good spin on it. We should use that more often. You should be able to use the posting of adjusted rates as an excuse to keep bumping the thread.
Also, since this is the main parking thread, I feel I should provide a link to the discussion we had about advertising parking and using the correct interest rates. Here is a response I made from another thread. The discussion is linked in the quote…
You can see it as a loan paying only interest without paying back instalments to reduce the loan.
For Nu it means paying interest to remove risk in the form of NuBits being sold for BTC or else when the reserves are low.
Same as a loan, the question remains whether Nu would be able to pay the interest and the loan in the future. If not, Nu can try to ask for another loan (parking) and continue only paying interest (park rates). This is not sustainable. The assumption is that at some point in the future NU would have built adequate reserves either by sales of NuBits and NuShares so parking is no longer required.
In line with your example with the bank in bad standing is similar. But maybe they can pay their debts in the next few months because some creditors have delayed payments. You can either have a ‘sarcastic smile’ or take a bet with either earning some money with interest rates or losing your investment. Everyone has a different risk assessment and risk appetite in time after all.
Nu is not a bank in lending business. Nu is a fintech start up. Parking is borrowing to pass bitcoin price surge period. So far all parked nubits, $190k of them at peak, will only have to be paid < 6k NBT in interest. That is peanut compared with 700k nubits out there. We are paying 5k amonth to liquidity ops. They are all business expenses. Hope that puts things in perspective.
That is a statement with a lot of facets to be considered. And to some extent your statement is correct. We are not a bank, but a customer in a broad sense and the market is the bank. To act as a bank, we would lend the money for better rates than we borrow, but we do not have that mechanism. We ask for money in return for interest rates and as with any other customer, we have to undergo a credit rating, too.
Now you and some others here might exactly know the situation of Nu, but I can tell you that I have no clue what our situation looks like. It is incredibly hard to tell what it needs for Nu as a network to either thrive or die. It is hard for me to grasp how many factors there are that are far beyond our control and how these factors are accounted for given the current architecture of Nu.
Putting things into perspective sometimes helps very much, but sometimes only represents part of the story. I do believe that the 6k NBT in interest compared to 700k NBT outstanding is only part of the story
I feel I have to invest an incredible amount of time and effort to map the relevant factors in order to draw a proper conclusion whether Nu might be able to pay me BTC for my parked NBT in 6 months, for example.
I have a hard time to judge the short and mid term downside risk of Nu. Let’s say I am looking for those 45 days at 2.77% interest rate investment option given the current situation of Nu and its dependency on Bitcoin volatility. If BTC goes up, other customers might start dumping their NBT and empty Nu’s BTC reserves, leaving me hoping that there is enough left to pay me back. If BTC goes down, I must hope that new customers will consider buying NBT to fill the reserves sufficiently to pay me back the proper USD value amount in BTC. So, in our situation a potential customer has to sort out quite a sophisticated lump of risk vectors compared to other investment alternatives, especially in the alt coin market.
I don’t have a put option for 45 days when I park my NBT, even if bad news about the Nu network pop up. Why, given the current situation, shouldn’t I put my money just in a liquid alt currency if I really only aim for a 2.77% gain? It gives me full control and it is highly unlikely that I lose my whole investment if I pick the right alt coin.
I am not saying that park rates are completely false. But in the end it is a mechanism that we put a lot of work and thought into without getting a return from it as a network. Let’s say we are soon perceived as a 100% parking network only for getting interest, every single NBT we sell being dumped back right after the parking period is over. Can we do anything with the parked NBT? Actually nothing but speculation, right? We can’t really spend them because we might face bankruptcy when the spending activity does not create any (quick) return.
Can we somehow map the relevant factors and create transparency for potential investors considering our park rate offer in a quickly comprehensible way?
In the end, if I don’t get this wrong, the positive correlation of park rates and financial distress of the Nu network leaves us with negative expectancy values for potential customers extremely quickly.
Assume you invest 100k dollars at 2% interest with a 1% (which is probably optimistic) chance of complete failure of the network.
Then the expected return calculates as
102,000 * 0.99 = 100,980 minus 100,000 * 0.01 = 1000 --> 99,980 --> leaving the customers with a negative expected value of 20 dollars assuming just 1% chance of network failure.
Why, as an average investor who puts at least a little thought into his investment decisions, would I invest into NBT to receive the parking rates, given our very young age and low experience resulting in high risk. It is not that we can tell anyone that our parking rates have worked for 10 years. We have to somehow break the loop that we are into.
The biggest mistake thus far was the NSR buyback and I don’t want to withhold at this point that I feel this mistake has not happened out of negligence, but possibly with intent. Though, this is another story I guess that is up to everyone’s philosophy without any chance to ever reveal the truth behind it. Therefore, I leave it like it is.
Thank you for taking your time and to analyze the situation and sharing your insights with us!
I feel that you hit the nail on the head.
I dearly hope you are wrong with this assumption and I suppose you are, although I need to admit that one can think about that.
It’s not slavish obedience that makes me think this was not the intention.
It did mean both Nu and BCE would be scacrificed by evil actors, who prepared all this in the background, tricked shareholders and FLOT to get a few tens of thousands of USD by selling NSR in the buyback?
Considering the potential Nu has (or had; hopefully still has!) and BCE has, this doesn’t seem to be a rational choice.
It would be a strange exit scenario.
It’s possible, but I don’t think it’s likely.
Why don’t those evil actors dump all remaining NSR on the market now, knowing that Nu is doomed and BCE will have a hard time without Nu and with lots of worthless NBT in it’s possession.
Even if BCE succeeds, it will not stimulate Nu’s business - Nu, or rather NBT, will be gone by then.
There’s only one thing that worries me more than the current liquidity situation and that is the discussion regarding the stop of T6 aka NSR sales.
This is the only means by which Nu can try to recover confidence.
The NSR sales need to continue.
We need them now.
And they should be used in case the NSR rate increases, although reserves might have been increased by then, but not to where we want them to be.
Who says that that person or group wanted to ultimately destroy Nu? The reason I didn’t dump my NSR is because NSR has good chances to recover in the end. The financial distress that has been created has a remarkable precision as to leave enough room for Nu to recover. There has indeed been a financial incentive to empty your bags during the buyback and then dump an amount of NBT that triggers NSR sales to refill reserves, almost guaranteeing that person or group dumping the NBT for BTC to be able to repurchase NSR at great prices, as we see now.
Another reason behind my theory is that I believe that only someone with extensive knowledge about the network would park amounts in NBT as high as has been dumped in one go just recently. Let’s hope I am totally wrong… If not, this would be incredibly disappointing and I will certainly have a close eye on whether such an event reoccurs with a similar setup. Only because someone says he didn’t know about or expect an event to occur, does not mean he or she didn’t know about or expect an event to occur.
Truth sometimes is the best camouflage.
I totally agree with you, we probably can’t stop NSR sales. And I am pretty confident that the lower the prices go, the higher the probability for the buyback funds to find their way back into the Nu network