Our recent failure in liquidity operations challenges us to find solutions. To understand the proper solution, we must first understand the role that centralization versus decentralization plays in liquidity operations.
Decentralized systems are expensive (due to redundancy) and tend to have slower response times than centralized systems. Decentralised systems excel at being censorship resistant. They can be more reliable if their tasks are simple and well understood by all participants, such as is the case with Bitcoin transactions in the Bitcoin network (every Bitcoin node knows exactly how Bitcoin transactions are formed and interpreted). However, if knowledge about the tasks is not well distributed or not well defined, decentralized systems can markedly under perform centralized structures when expert knowledge is required to make competent decisions. That is our situation. We decentralized liquidity operations. The twenty or so participants who make decisions simply don’t have the expert knowledge needed to manage the liquidity. So you get incoherence, massive violations of NuLaw (perhaps in most cases due to ignorance of the law) and failure to function.
I have already suggested we address this by relying much less on a smooth functioning liquidity engine. This can be accomplished by raising reserves to full. However, there is much more we can do to improve liquidity operations. We need to have expert knowledge informing each decision about liquidity operations. This is always true, but the deeper the crisis the more this is true. Given that our crisis is full measure, and liquidity operations are currently non-existent (in other words, decentralized liquidity has completely failed at the present time), it is clear liquidity operations need expert guidance more than ever right now. It also requires agility, coherance and competence. I can provide all those things to shareholders as a liquidity expert in charge of liquidity operations.
We can’t afford to pay twenty people to become liquidity operations experts. But we can pay for one liquidity expert to manage the entire process. That is exactly how we need to move forward. Appointment me as Chief of Liquidity Operations. Those who work with shareholder funds in liquidity operations will be required to follow my orders regarding liquidity operations. To ensure success, I will need to have sole discretion over the use of all shareholder funds intended for use in liquidity operations. I need sole control over NSR sales. I need sole control over the peg level. I need sole control over spreads. NuShare holders, your decentralized liquidity operations failed and lie in ruin. I can bring order and life to liquidity operations right away. To be effective, I need to be in charge.
I realize the notion of hierarchical command structures is not popular here. However, such a structure will be very useful for this purpose, and we shouldn’t choose a path that will produce very suboptimal results for ideological reasons. However, the core of the system would remain completely decentralized, as it should be. You should never make a change that would take fundamental control from the individual shareholder. Individual shareholders will still control the creation of all assets and tokens. That is the real power in the system. They still control motions. They still control all transaction processing. It is still a very decentralized system. They can fire me whenever they like. I am accountable to them. It is clear that utilizing expert opinion through a hierarchical structure is the cheapest way to get the most effective liquidity operations.
With me as Chief of Liquidity Operations, we will rebuild confidence in our liquidity operations, even as we rely on them less due to increased reserves. Its a winning strategy that will win market confidence.
I will be preparing a motion to support me as Chief of Liquidity Operations very soon. I will also continue to publish what I believe should be done, so that shareholders will understand what liquidity operations would look like were I in charge. I have already indicated in the last 24 hours what I think should be done right now, so please examine my recent posts if you want details.