Park Rate Voting

NuShares
#634

Park rates for 1.5 months and less are currently dropping. That is a very expensive direction for rates to move at this time. I am certain it will cost shareholders a lot more money than if they raised these rates. Our other option is to sell NSR, but that is very expensive at the moment, given the low NSR price. Overwhelmingly, getting support at this time with park rates is the cheaper option.

Please set park rates for 5.7 days to 6 months at 28% annually. It is quite possible we will want to go higher soon.

#635

With very little buy support for NSR (only a few BTC on orders), increasing park rates seems necessary in the short term to boost demand for NBT, which will hopefully reduce NSR sell pressure required to keep the peg.

Itā€™ll be interesting to see if Nu can avoid dropping the peg this time.

Keeping reserves so low in the good times late last year has put Nu in a difficult position nowā€¦ I just hope NBT holders hold, and NSR buy support picks up soon.

#636

I am 100% willing to help the struggling peg. However, first I must have a general idea of the parking rates so that I can make a proper risk assessment. I am sure I am not the only one wondering, so can somebody please provide me with the current parking rates? Thanks in advance.

1 Like
#637
#638

I am surprised to see park rates declining from the high 50ā€™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 canā€™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 letā€™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.

#639

Surprisingly the only way I found the park rate is to download and synchronize (can last several days) the Nu wallet.
Then you go in the park section.

#640

currently sitting at 51% in the wallet.

#641

Park rates are also available here.

Park rates are on their way up to 58% annually at this point. I am happy to see it. Letā€™s go even higher, to 70% annually, then we can evaluate.

1 Like
#642

Why would nushares be bought back at 1000% of what they are being sold for?

#643

Iā€™m a relative outsider to NuBits, though as you can check Iā€™ve actually had an account on this forum for almost as long as the forum has existed.

So, as an outsider, I just want to say that it does not inspire confidence when I see Chief of liquidity operations suggesting higher park rates. Let me summarize from an outsiderā€™s perspective: you donā€™t have enough cash on hand to support the peg at the current Nubit supply, so your solution is to grow the nubit supply by at least double-digit percentages over the next several months. The problem is that there are too many Nubits and you canā€™t afford to buy them back, so to solve the oversupply problem, you suggest increasing the supply. Correct?

Think of me as someone who would love to profit from Nubitsā€™ current under-valuation, but isnā€™t willing to throw a ton of cash at it because Iā€™m afraid itā€™s a house of cards. How do you plan to convince people that itā€™s not a house of cards?

#644

@biophil

Greetings stranger.

Your analysis is correct, and Iā€™ve said the same on other threads. The park rate should currently be zero. Other changes also need to be made to make this system work in the future (which include replacing the leadership which either does not understand what both you and I have said, or understands perfectly but prefers the status quo for their own benefit), but the appetite doesnā€™t seem to be there.

#645

I suppose the strategic situation essentially goes like this (in caricature): The shareholders have to choose between diluting NSR and diluting NBT. If the peg is not restored, the shareholders lose regardless of which token they diluted. If the peg is restored, the existing shareholders still lose if the peg was restored by NSR dilution.

The only way the existing shareholders win is if the peg is restored by NBT dilution. They have a weakly dominant strategy to vote for NBT dilution.

This sketch would make a real game theorist cry, but itā€™s a basic explanation for why it might not be totally irrational for the shareholders to vote for NBT dilution.

#646

Park rates are once again in decline at 56% annually for USNBT for up to six months. NuBit support has been harmed by minting shareholders choosing to lower rates instead of continuing to raise them as I had recommended.

It is very clear lowering interest rates now is very injurious to all types of parties involved: it hurts the interests of NuBit holders, hurts the credibility of the project, but most of all it really hurts NSR shareholders. This is because there are two ways to support NuBits right now: interest rates and NSR sales. It is very clear using NSR sales incurs many times the cost of interest rates. So only using a fraction of the capacity of interest rates is indefensible in terms of the interests of shareholders and NuBit holders. Furthermore, it is clear that in recent weeks that interest rates have provided more price support than NSR sales, given the low liquidity of NSR at the present time.

Nu is above all an experiment to see whether interest rates can be used to support the value of a stable currency. It is a shame to have the experiment muddied and distorted by not using the full capacity of the design, as shareholders are currently choosing to do. I assure everyone this is a very costly mistake on the part of NSR holders.

Stop it!

Raise rates immediately to 70%, for a period of up to 6 months.

#647

Please explain how inflation of available NBT does not make the peg more difficult to maintain in the near (3-6months) future.

Just market sold on seeing the Chief of Liquidity throw a semi-tantrum with no response to the accusation that he is putting current shareholderā€™s interest ahead of NuBits holdersā€™. I like the concept, but if you arenā€™t willing or capable of convincing the people interested enough to get to this forum that you have your customerā€™s best interests at heart, Iā€™m out. I donā€™t invest in moonshots, I invest in tech and teams I believe in.

I hope, for the sake of those who counted on NuShare holders to maintain the NuBits peg, that itā€™s regained, and I miss out on recouping my losses. I do. But any business (NuShares) that doesnā€™t put their customers (NuBits holders) first is doomed. Maybe not this time, but someone with more dedication and less self-interest will come along and eat your lunch one day.

#648

I can understand why some hate park rates so much, itā€™s scary to think that when price is below $1 the coin supply is increasing. However this isnā€™t necessarily a bad thing. Interest rates are here to create demand for the coin, when people park their Nubits it isnā€™t an instantaneous supply increase which would lead to all coins being dumped on the market at the same time and make the problem worst, it is a slow and subtle dilution. If people park their coins, their coins and interest are LOCKED IN, meaning they cannot spend it no matter how bad they want their coins! Indeed, park rates arenā€™t just an instant coin creation mechanism which would instantly dilute the market. Sure, there are 5, 11, and 22 day options, however there are people who donā€™t want to risk having lower interest rates right after their coins get unparked, some investors believe peg recovery is inevitable and therefore choose the long term options, meaning any potential dilution can be as far as 6 months from now, not ā€œOh no, 70% interest rates means instant dilution, DUMP DUMP DUMPā€. Even then after parking, investors would have the options to instantly sell, only sell a portion, or not not even sell at all, park rates are certainly not a 100% pathway towards instant inflation and inevitable market sell offs. Park rates create demand for the coin when times are difficult and effectively work as IOUā€™s, most modern economies work like this, the USA for example offers interest rates for anyone willing to lend it money.

#649

Parking rates are currently very low:

{
    "8192 blocks" : 0.00152944,
    "16384 blocks" : 0.00306953,
    "32768 blocks" : 0.00808531,
    "65536 blocks" : 0.02410515,
    "131072 blocks" : 0.04821031,
    "262144 blocks" : 0.09642062
}

With the upcoming partnership with BarterTrade and the listing there we have a potential way to regain the peg. A good strategy for entering this new phase would be to have relatively high parking rates in order to attract holders to park their USNBT. This would take them out of circulation and make peg restoration easier as well as meaning that some large sales could be staggered over time instead of taking place as soon as the listing is in place.
I would encourage voting NSR holders to raise the rates they vote for in their client. I also hope to start a conversation here about what the rates should be. My feeling and the feeling of others I have spoken to is that the rates should be in the range of 20% for the short term and increasing from there to the 6 month mark. I would be interested to hear NSR holders thoughts on this.

1 Like
#650

It is better to leave park rates low and focus on buying back NuBits at a low price. By prematurely supporting the price of NuBits before the supply is reduced to a more sustainable level via buybacks, the park rates and buybacks are working at cross purposes.

A good benchmark would be to restore park rates once the outstanding supply of NuBits is reduced enough via buybacks to restore the reserve ratio, assuming $1 NuBits, to a sustainable range (we can debate what that range is, but it is certainly not there now)