[Passed] Peercoin FLOT Reserve

[discussion] T4 Zoology
[Draft] T5 reserve

Motion RIPEMD160 hash: 6311782b5d731cd45dd6873b24bcd6e62846fb2d

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Reserve DefinitionNu will attempt to hold the equivalent value of 5% of the circulating NBT in Peercoin (PPC) using a T4 FLOT multisig address. A second round of elections for FLOT members will open upon passage of this motion and will close on March 15th at 12:01 UTC. Current FLOT members can join the PPC multisig at will. This address is allowed to mint if technically able. If fewer than 4 FLOT members are found for the multisig this motion is void.

Market Actions and PPC Executor@Nagalim will volunteer to begin as PPC Executor to perform market actions on BTC-e to buy and sell PPC for BTC. No actions will be taken until April 1st. This service will come at no cost to Nu and will be provided indefinitely. @Nagalim will cease operations via post in Nubits forum with as much warning as possible. If there is no executor, the FLOT members in charge of the PPC multisig may come to consensus themselves as to how to proceed. As PPC is expected to have much more market volume than NSR, a strict regiment is unnecessary. However, a general outline for procedure is that around wednesday at 12:00 UTC the executor will switch from being a market maker to being a market taker.

Buying PPC and Modification to Current NSR Buyback ProcessThe velocity of the NSR buyback specified in motion 7b4955e91781e0e32f1e0c0c974fd4a7a9f972a3 will be reduced to 5% of the BTC overflow and limited to a minimum of $2,500 equivalent (below which the NSR buyback will be skipped for the week). Another 5% of the BTC overflow will be used to purchase PPC to place in the multisig account.

PPC overflowTaking the price each Friday at 12:00 UTC, if the PPC reserve exceeds 5% of the circulating NBT, 10% of the PPC overflow (that exceeding 5% of the circulating NBT) will be used to buy BTC, limited to a minimum of $1,000. If the value of the PPC reserve has exceeded its 5% of circulating NBT for the week, the overflow BTC that would be used for PPC purchase should be sent to the NSR buyback executor instead to purchase and burn NSR.

Peg BreakThe FLOT members assigned to the PPC multisig address have full authority to use the PPC to defend the peg. Confirmation of intended market actions should be sought from the PPC executor before moving funds and in dire situations FLOT has the authority to improvise an executor to defend the peg.

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Verify. Use everything between and including the <motionhash></motionhash> tags.

So when fully filled this is to be an additional 5% reserve on top of the 15% one we currently have, correct? I like it as stated before in your other thread about diversification of reserves into alt coins. I will be available as a member for the PPC multisig under the same conditions as my other FLOT responsibilities.

That is ~100 btc worth of ppc currently. Seems OK to purchase on btc-e without disturbing the market too much.

what does it mean?

Can you explain how you get the numbers with a break down step-by-step calculation example, like it is in NSR buy-back?


I will be placing orders below or above market price to catch panicers until about halfway through the week when i will push and take existing market orders.

It will indeed total 20% in T4 reserves.

Say we have 1,000 btc, 0 ppc, btc=$100, ppc=$0.1, 100,000 nbt in circulation. We keep $15,000=150 btc in T4, put 42.5btc=$4,250 into nsr, and 42.5btc=$4,250=42,500 ppc.
Clearly the situation is different, but i hope you get it.

Edit: sry bout the numbers, easy math is hard.

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Like the diversification and extending the reserves slightly.
Also wondered about the market taker role, does it mean buy/sell at market price?

Would support this motion as it stands now.

So let’s say the last price was 0.001, highest buy order is 0.00098 and lowest sell is 0.00102. I have btc and want to buy ppc. For the first half of the week, ill put up orders at or below 0.0098. Around wednesday ill start moving them to 0.001 and taking some 0.00102 orders. Clearly the market will be moving and this is a model, but something like that.

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NSR is way more distributed. The reason to do nsr buy back is because we are not happy with letting FLOT, eventhough it’s multisig, hold the btc. Why do we feel happy to hold a lot of PPC? PPC is perceived free of certain risks of BTC but its exchange rate risk is still very high, on par with that of BTC.

I can understand why we want to substitute some BTCs in T4 reserve (150 above). Taking a half NSR buy back out with buying PPC is quite a big change of how Nu operates.

Does it change your mind that if the ppc reserve is full the buyback is the same 10% that it currently is? If our ppc reserve is full the btc goes to nsr instead of ppc.

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I’m totally for diversifying reserves.
And I appreciate having PPC reserves on top of the current cash liquidity reserves.
Until NSR has significantly more daily, reserves like that are cheaper than putting all in NSR buybacks:
buying and selling PPC moves the markets less than buying and selling NSR.

That would be good.

Any further comments?

Yah, but I think it might not be too popular:
stop buybacks for some time completely. Create a diversified reserve to evade BTC volatility. Invest T4 in development. Improve liquidity operation.

I don’t believe any longer that buybacks are currently the best thing Nu can do with the money.
The BTC volatility needs to be reduced, sure.
Trying to put all in NSR buybacks might conceptually be the right way (and in a future with bigger adoption this should be the way to go), but with the low trading volume, NSR can’t be converted into money without significant discounts.
I doubt Nu is worse off having reserves in external units at the moment.
Please convince me that I’m wrong.

I was thinking about posting that for some time. I finally dediced to do it.
If a motion to stop buyback buybacks (for some time) to rather invest the money in diversified reserves, development, etc. doesn’t pass, it’s a sign that the majority of (voting) NSR holders wants to have the ability to abandon the boat.

That sign would undermine my willingness to do all I can to support the peg.
I think I need to face the truth.


The price of all cryptocurrencies are 99% correlated with btc price. That is the old fundamental problem of having a full reserve for nubits – you cannot store the reserve in fiat in a decentralized and liquid way, you have to do it with some cryptocurrency. That might well be Nushares, whose holders want nubits to work. You cannot say that about btc or ppc.

When buy back started nsr/btc was 700 satoshis. Now it is about 800. Might that be the reason of your disappointment? If yes, you might have overlooked that btc price has doubled from $225 in the mean time. NSR prices could be 400 sat now w/o buy back.

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I’d rather pay an uplift of 10% and put a share of the reserve in bitUSD to evade volatility to keeping all in BTC or investing all in NSR.
The Dai might be an alternative once it’s working.
Development is an investment that can pay off as well (in terms of total value of Nu).

Totally not, because that allowed Nu to buy back more NSR for the money.

The thing is:
if Nu needs to sell NSR to support the peg, how much loss do you think Nu needs to face? I’m speaking of the difference between average buy price during the byback and the average sell price in an auction ot whatever.
Would that be bigger or smaller than the volatility risk or risks of other diversifications (and their financial implications)?

NSR price is still as tied to BTC as other crypto currencies are…

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Ideally we will never sell as much as we buy. We have park rates, Txn fees, and inflation to consider.

@masterOfDisaster you’ll notice that there is a very specific parameter we could tune: the buyback ratios. Currently I’m proposing 5%:5% NSR:PPC. Once the PPC reserve stabilizes, we could make an LTC reserve and further reduce the buyback ratio, even as far as 0% NSR. Note that in all cases, if we have nothing else to do with our money (i.e. the other reserves are full), we are forced to put our extra liabilities (more than we are willing to hold by definition of our reserves being full) into NSR as a buyback at a rate of 10% of the overflow per week. I think this is a good business model, and we just need to keep making motions like the OP and with time we’ll have everything you’re hoping for plus potential for buybacks if all our investments are doing well.

it’s not liquid. Difficult to buy at $1 iirc.

Good point. I think the average buy was ~$50/10k and the auction price was ~ $20/10k. Not too bad compared with btc volatillity in recent years (something like 400%).

Anyway I AM for diverse reserve, such as those in ppc, and in @Dhume’s and @ttutdxh’s proposals. If someone can offer futures-backed hedging that would be also good.

That’s why MoD says 10% overcharge. I’d rather take the investment gamble of BTC myself than the guaranteed loss (and fraction reserve marketing) of buying BitUSD with NBT proceeds.

Yah but the volumes were so vastly different. This is like that series problem where you have an infinite series of +1-1+1-1+1-1+… and depending on how you group it you can show that the series sums to any number you want.


Adding to my datafeed. Looking forward to the next one for Litecoin or Ethereum or something like that.
I think diversification is great. The buybacks are a nice vehicle for those shareholders who want to leave or make a quick buck assuming they can buy in low later. The NSR reserve is of limited value when large amounts needs to be sold beyond the NSR FLOT reserves.


Diversification of reserves is important for sure.
Not only in terms of instruments but also in terms who holds the instrument.

Is peercoin enough uncorrelated to bitcoin?

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