The motion sounds simple and good.
I only wonder how it will be prevented selling those NSR that will not be counted in dividend distribution to enter the market. How can they be told apart from "regular" NSR?
I guess I have misunderstood a crucial part of that approach.
That may render the following thoughts useless. We'll see..
I wonder if it can be used in it's very simple approach for an idea I voiced in the "Possible solution to custodian loss of value due to BTC exposure" thread (for which I could only think up complex solutions):
This would be in difference to the "Finalized evolution of liquidity operations"
a way to keep the value of the NBT in circulation independent from the price level of BTC, PPC, etc.
Crypto currencies that are sold for NBT by custodians (LPC) are sent (in part) to OP_RETURN.
This is only possible if they are exchanged for NBT, because only NBT can be burned.
To prevent that from affecting the liquidity, the way custodians work currently needs to be shifted slightly.
Currently NBT that are issued are put in exchange sell walls.
The future mode of operation would require to create double the NBT that are meant to be put into sell walls.
Half of the NBT would be put into NBTUSD buy walls.
BTC and PPC that are received when selling NBT are traded at BTCUSD and PPCUSD markets and the USD are sold to the NBTUSD buy walls.
Those NBT are in part sent to OP_RETURN, incorporating the value into the Nu network.
This dilutes the NSR, but as it incorporates the value of BTC and PPC into the value of the Nu network; it doesn't sound as a bad deal, does it?
Liquidity provider and "NSR custodian" could be the same person, but not necessarily need to be.
As the NuShares that are created by that burn process
there needs to be a way to burn the NSR to NBT once the NBT are used again for filling up BTC and PPC walls. You don't want to sell NSR that don't receive dividends, right?
One drawback is for sure the exchange fees that need to be paid for all the steps. Exchanges might offer a special rate for that.
It looks like the need for that has already been voiced and at least one exchange (exco.in) quickly offered 0% fees!
That was for a different topic, but it seems that exchange could generally be willing to do that.
I started to confuse myself when I tried to sort it and write it down. I'm almost sure there's a big flaw so obvious that I can't find it although it sticks out like a sore thumb for anyone else.
Can you please help me to find it?
Until now I see this as a way to develop Nu into a "low percentage of reserve" currency that is backed almost solely by the assets of Nu, the NSR.
I'm aware that there needs to be more market volume in the NSR markets for that to work frictionless, but at least it appears to be an idea for getting in that direction.
As long as Nu prospers I estimate not only a demand for NBT (which might be a reason to turn NSR back to NBT), but a demand for NSR as well. That demand allows selling the "burn NSR" at acceptable rates.
The standard way to create liquidity (LPC) remains untouched.