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
That is the White Paper and Nu Business Process Map. They are very outdated. No one updated them as i think no one seems to be able to update it fast enough. Imagin you invested in a dot-com start-up in 1997. It was really hard to give a rationalized business plan that will survive 10 years. You could stay out of it all like Buffett did IT companies and stay the hell out of cryptos. But knowing the huge up and downs in dot-coms, would you ?
So…what is everyone voting?
NBT needs to be attractive during BTC runs. So park rates should be competitive.
I’m going to vote for 75%+. That way - even if the spread doesn’t get changed - there is still profit in a month…
That appears too gigantic to be true for averag users, i guess
I gave my reasoning here. The parameters can be adjusted. Do you agree my reasoning ?
I agree with you reasoning and like it - under unstressed conditions.
As it stands with the 5% spread - there’s no break even guarantee.
That is why I called for 75%.
75% APR is 6.25% per month. Which will just make a little profit after spread.
Fine. It is jsut changing the “half” factor to something higher, in the same frame work.
Yes. Sorry - I was not as eloquent, nor did I explain myself as well as you.
75% is the APR, which isn’t actually what Nu will be paying out at the end of the park period. The actual percentage a parker would earn is much smaller than this. The percentages per park period are the rates we should be using for advertising, not APR, which looks scary to the average person. I explained this all here. Please check it out…
We need both talkers and doers.
Here are the park period percentages if APR was set to 75% for all durations…
5.7 Days per Park Period = 1.17% <-----> 64 Park Periods per Year = 75% APR
11.4 Days per Park Period = 2.34% <------> 32 Park Periods per Year = 75% APR
22.8 Days per Park Period = 4.69% <------> 16 Park Periods per Year = 75% APR
45.5 Days per Park Period = 9.37% <------> 8 Park Periods per Year = 75% APR
91.0 Days per Park Period = 18.75% <------> 4 Park Periods per Year = 75% APR
Yes, APR should be a term that we use internally, not for marketing purpose
Do you believe APR should be removed from the https://www.parkingyournubits.rocks/ calculator, so that it only uses the single park period percentages? That is a marketing website for parking rates and earnings, but I’m not sure if it should be removed entirely or if it has some use for people. We just don’t want those high numbers scaring people away if they’re visible on websites like this.
If people dont actually park for a 1y period, I believe it is a noisy info.
Sorry I guess I run in the world of finance too much where APR is just a term that I assume others understand.
The unique NBT/USD peg on SouthXchange is NOT broken. Fiat can exchange with Nubits at 0 spread. This solves the not-getting-my-type-of-currency problem above. Maybe we should advertize parking where fiat is (especially paypal)
I agree it is working at SX. As is the paypal withdrawal. But you do pay 5% fee.