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.
[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
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:
Is my understanding correct?
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.
I think you are right.
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
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?
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.
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.
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.
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.
I strongly second that.
How so? and to which extent is it approved and monitored by shareholders?
Tier 4 buy side liquidity now stands at 43,000 NBT of value. About 10,000 of this is currently moving up to tier 1 and 2. With the recent loss of CCEDK (temporary), BTER and Excoin as places to provide liquidity we are currently operating on very few exchanges. Just Bitspark and Allcoin at the moment.
So while liquidity is low because there are few outlets to offer it at right now, it also true that tier 4 is thinner than ever before. I don’t have information about tier 2 liquidity, although I believe there are modest funds there. Individuals LPCs currently have the information about that.
There is currently 16,000 NBT in tier 1 buy support. Therefore, the total buy side liquidity available in tier 1 to 4 is likely between 64,000 and 90,000, with uncertainty coming from tier 2.
Certainly the case for interest rates has never been stronger.
I am ready for setting non zero interest rates though I am not sure exactly sure about what to input.
Here is how I just made my decision: Think about how long you expect the parking to be required. Then set a reasonable interest rate for the corresponding duration that is sufficiently large to attract the money we want to have parked. Then decrease the interest rate exponentially for shorter durations and increase interest rates logarithmically for longer durations.
Problem is missing data … in future we hopefully have the experience to know how much interest is required at a particular duration to encourage people to park a specific amount of NBT.
Missing data is an issue. Although we do know that we need to defend the peg in the short term. Getting more custodians up to speed in short term is challenging and likely far more expensive than park rates. With park rates we take money temporary out reducing the need for liquidity. Therefore I’m going to start voting for relatively high interest rates around the 6 months term.
Proposing to start with 5% for 6 months and 10% for a year. No custodian which offers that or will offer that in the short term. Will continue to evaluate the situation with liquidity pools etc. and will stop voting for interest rates when more than 100k is parked or significant liquidity is added to tier 3 and 4. Based on the information I have less than 25k is parked (a few weeks ago). I hope that information about the amount of parked funds becomes publicly available soon.
Will update my datafeed soon…