When our btc reserve is valued above 15% of our nbt debt, the remaining btc is considered ‘overflow’. We then take 10% of that to buy nsr. This motion says instead take 5% and buy ppc and reduce the nsr buy to just 5% (so the total 10% is the same). If the ppc reserve is full, go back to 10% nsr.
The 10% are taken each week. In each week the overflow gets calculated anew and 10% are used for…
…just in case that would confuse some…
Thanks for your elaborations -
Will add this to my voting datafeed
20% reserve in T4 will be reached in the ideal case.
What about 25% or 30%?
We are not aiming at 100% reserve because I do not think it is financially meaningful but what is the rationale behind 20%?
And this motion introduces a drawback: less NSRs buy backs.
Are shareholders are fine with less buy backs?
To say this reduces buybacks as a whole is a misunderstanding i think. This reduces buyback velocity, for sure, but it gives us several things. Firstly, it boosts us to 20% , like you say. No one knows the right number here but many shareholders were concerned that 15% is just too low. I think there will come a day when we are backing 50% with a well diversified portfolio. And that’s where you see the real boon of this grant: we are opening an investment portfolio, and thereby an additional avenue of risk and reward. The use of NBT pegged to a stable value gives us an excellent opportunity to define what is meant by “Buy low, sell high” by referencing 5% of our nbt supply as the neutral point. This causes us to buy when ppc goes down and sell when it goes up.
Anyway, there’s like a million other benefits to having more cash on hand, especially cash that can easily be distributed to shareholders at the drop of a dime in case of cataclysmic failure of what have you. Diversification is a golden thing.
Which brings me to my conclusion: by hedging into different cryptos instead of btc we will broaden our economic impact and stabilize. Does that mean a lower buyback velocity? Of course, the money has tp come from somewhere. However, it also makes us a stronger company, meaning we may be able to continue a sustained level of buybacks that would not be possible otherwise.
We could drop the T4 % to 0 and that would increase buybacks for a couple months before we go broke and have to close up shop. This motion is important, in my opinion, to keep Nu floating so we can do more buybacks (and dividend distributions) later.
And the 15% is already an increase of the previous reserve level.
We already back 100%, but not on T4
Each NBT is ultimately backed by NSR. The T4 reserve is just a buffer to prevent frequent NSR interaction as long as NSR has little market volume.
It depends on the point of view, but you could say the T4 reserve includes 25 milion NSR as well, which are controlled by FLOT.
While NSR is conceptually on T6, the NSR under FLOT control (and no longer direct shareholder control) are rather T4.
Ideally the T4 reserves are sufficient to deal with all kinds of swings in demand. For that reason it should rather be big than small.
The volatility risk of funds on T4 is an issue that needs to be dealt with, before the ratio of T4 reserves should be boosted by far.
Including PPC as next step in the T4 reserve portfolio makes a lot of sense. PPC are remarkably stable, albeit depending on BTC to some degree and you shouldn’t forget that PPC are the status quo for distributing dividends; after all they can be used for that.
I long for BCE.
It will be a lot of fun to operate NuBots on BCE that have a big offset on the PPC/NBT pair and each time Nu buys or sells PPC, there’s a gain.
I wonder whether a NSR/NBT pair can increase the market volume of NSR by far.
Half of nubits sales as profits for Nu would still be juicy but who knows if 50% is the optimum figure.
Can’t we do that already with ALPs or MLPs?
I agree overall that 15% might be too low.
And that diversification is a good thing.
Let us see if those 5% of ppc reserves will make us stronger.
If yes, let us keep on increasing. If not, let us revert that.
6311782b5d731cd45dd6873b24bcd6e62846fb2d verified and voted
nothing help from PPC to peg nubit , leave it alone .
Im not sure i understand, but do you agree that diversification of our portfolio is a good thing?
it is a Good thing , but please leave CryptoCurrency.
and the idea from Nusafe is good.
Even nusafe relies on crypto for collateral. We have not seen a proposal that is truly 100% orthoganol to crypto.
you are right , we still in a crypto world with up and down…
we could buy options to hedge btc price risks. and crypto assets pegged to non-crypto assets.
there is still counterparty risk. But at least our risk portfolio is diversified.
We can use centralized stable tokens as reserves as long as they would have multisignature wallets available.
For example FLOT could make a paypal multisignature account and keep some BTC there as fiat. But i don’t thing that paypal provides this service yet.
What about tether?
Great to see this passed!
Just a reminder to all that this means Peercoin FLOT Elections are now open for voting. Please feel free to submit your motion containing your conditions for shareholder approval. The standard voting window must be achieved by March 15th at 12:01 UTC.
Current FLOT members may ignore this message, as they do not have to be re-elected to join.
Given the current state of the NSR group and the fact that Peercoin shares the same multisig code with Nu, I’d suggest reusing the NSR group.
That’s a good point. We’d need consensus from the NSR group. Maybe we can still hold new FLOT elections (we kind of have to by word of the motion) and we can just put them on the tether multisig instead. I attempted to make the wording of the motion such that when an FLOT member is elected they are elected for all of FLOT, not specifically for any one reserve.
To avoid moD being overworked perhaps I can take his place here.
I’m all for this, can’t see a scenario where NSR group is suddenly going to start getting busy so should be fine to do the PPC multisig as well in my opinion.