Nu could encourage liquidity provision when liquidity is low by setting the interest rate higher when liquidity is low. For example it seems easy to implement for ALP – just fix the total payout every minute so that less total liquidity gets to earn more interest for the remaining liquidity providers. This fixed perminut pay out also allows removal of fixed target, simplifying operation, and feels fairer to the liquidity exceeding the target (they can earn interest as everyone else)
This is a very cool idea. Can you or I make a post about it? Possibly turn it into a motion eventually? There’s a lot to talk about there, as it changes the dynamics such that shareholders directly control things a lot more. Removal of fixed targets would be immense but it also necessarily increases amount of money paid out per month (no more rollover dollars) assuming fixed pool rates (i.e. rates would need to go down). Though you’re very right about it simplifying a lot of the economics.
I think it would be a nice way to further reduce the counter-party risk of Tier 4 while at the same time increasing the wealth of shareholders.
By the way, who would manage the remaining 80k in Tier 4? It also needs to get decentralized and counter-party-risk-free.
Does it suggest that this buy back draft intend to elevate the NSR price in preparation of shares sales if case we need to put some pressure on the buy side of the peg?
I hope it will elevate the NSR price in preparation for larger, additional share buybacks resulting from continued increases in demand for NuBits. But no one knows what will happen with NuBit demand. We will let ongoing liquidity and park rate data guide us in choosing between NSR buybacks and NSR sales.
This has been hashed for voting:
The Verify link doesn’t work because @assistant is unavailable right now.
Supporting this interim solution awaiting further tier 4 management improvements as result of management changes. Added to my datafeed.
After several review, the motion seems reasonable and that does not hurt NSR value. Voted
I think this proposal is reasonable and needed: a relatively substantial amount of funds remain in Tier 4 to protect the peg if needed (this plays the role of an insurance) while at the same time the network starts doing a buy back of NSRs since it has enough buy side liquidity (to give some returns to shareholders as a reward for expanding the network)
Share buybacks currently have 38.66% support, and the number is still rapidly rising. If this motion passes before the end of Friday UTC, we will begin conducting share buybacks this weekend.
This has passed. The first buyback cycle will begin this Saturday. The total tier 4 buy side funds as of end of Friday UTC will be announced, which will determine the size of the buyback for this week. It is on track to be between $2000 and $3000.
I’ll begin working with @JordanLee this weekend to coordinate the buyback next week. In the meantime, if you are interested in selling NSR for less than 70% of the current market price please send a BitMessage to BM-2cVFzzfWwKkdxLmgZwhSFfGmKwqDrddDfv. Otherwise the buy wall will be set according to the motion at a random time each day next week.
Tier 4 buy side funds consist of 446.9 BTC. At a price of $235.09, the $80,000 excluded from the share buyback calculation equals 340.3 BTC. 106.6 BTC sits in the share buyback pool. 10% of this (10.7 BTC) will be used for share buyback next week. That is equivalent to approximately $2506.
All shareholders have an economic incentive to sell a small portion of their shares to Nu at an inflated price and buy back lower to solidify the network’s earnings. At least, that’s the way I see it. I.e. put up sky high nsr sell orders for a week.
Predicting the market is difficult. Some shareholders might have an incentive to sell their NSR at the lower purchase walls that are placed, if they are looking to sell many NSR and are concerned the total buyback (currently around $25,000) won’t be enough to satisfy all shareholders looking to exit. Likewise, shareholders could sell some of their shares on a Friday at inflated prices, but discover that the NSR market has accelerated in the wake of this positive news, removing their ability to buy back lower in the future.
I think we can agree that these share buybacks will be an effective tool for enhancing price discovery at the very least.