I am surprised to see park rates declining from the high 50’s on an annual basis to just above 50%. This is unquestionably a very expensive decision by minting shareholders.
There are two ways to support NuBits under the present circumstances: park rates and NSR sales. Because support is currently insufficient, we need to use both right now. However, it is abundantly clear that park rates are far, far cheaper for shareholders than NSR sales. Consider that just a few months ago we were buying lots of NSR for 150 BTC satoshis when BTC was worth a lot more than now. We are currently selling NSR at 4 BTC satoshis. We can’t say what we will have to buy that NSR back for, but chances are very high it will much, much higher.
The maximum liability for a 58% park rate up to 6 months is 29%. So, for park rates we have a maximum pay off expense of 29%, but for NSR sales, there is a very good chance it will exceed 1000%. The differences in cost to shareholders are staggering.
Many USNBT have been parked in recent weeks. Prior to the problems with USNBT value, there were about 325,000 USNBT parked. Now there are 1.3 million. While it is clear parking is much more powerful for supporting the peg in the current circumstances, it is also dramatically less expensive.
Dropping park rates will remove most of our ability to support NuBit pricing, as well as dramatically raise the average cost of support. It is a losing move for NSR holders, USNBT holders, Nu contractors, indeed everyone remotely involved in the project. There are no winners at all with this change. So far as I can see, there is absolutely no chance of anyone gaining from this change! So let’s not do it.
There are two protocol problems related to park rates that may be contributing to the problem of low park rates. One is that it calculates based on share days destroyed, instead of simply using 1 vote per block. Shareholders long ago passed a motion to make this needed change, but no one involved in development has ever implemented it.
It is also clear park rates rise too slowly. I recommend a protocol change to make rates rise twice as fast.
Given how much cheaper park rates are for Nu than NSR sales, essentially rates to should be raised consistently as fast as they can be (3% per day), until the peg is restored.
The current behavior of minting shareholders is seriously suboptimal.
Any minting shareholders care to share why they are doing this? It may be that old shares have just starting minting without setting park rates, thereby exposing the protocol flaw shareholders have already agreed to change.
Shareholders, please start minting, and configure your park rates for 70% annual rate for up to 6 months.