The First Strategic Reserve Team or FSRT would like to propose the following multisignature custodial grant, the text of which (beginning with the letter N and ending with a period) has a RIPEMD-160 hash of :
NBT address: BhCnQrYrA5LZm871dtMQEXeU93gmqbhdrC
NBT amount: 4040000
The purpose of this grant is to create a strategic reserve of NuBits. There are only two circumstances under which the FSRT would transfer the funds granted:
- If the sell side liquidity from other custodians becomes thin enough that there is a significant risk the NuBit peg will be lost before additional custodial grants can be passed.
- If shareholders instruct the FSRT to transfer the funds via the passage of a motion.
If the first circumstance above becomes a reality the FSRT will have need to exercise its discretion about how the funds are used. The FSRT is inclined to release them to an established custodian who pledges to use them to recycle the funds as an LPC, but the FSRT does not promise to do this so that they have the appropriate liberty to respond to an unforeseen situation. It is possible they might distribute them as dividends or use the proceeds for some other purpose in the interest of shareholders. In any case, the primary goal will be to provide emergency liquidity to facilitate the maintenance of the price peg.
If the second circumstance above becomes a reality the FSRT will do its utmost to implement the contents of the shareholder motion. This scenario may occur as a result of a member of the FSRT resigning, which would make it necessary to choose a new team member and transfer the funds to a new multisig address that excludes the previous team member’s key and includes the new team member’s key. In that case commission would not be taken. It will only be taken when the funds pass out of the control of the FSRT.
The address above (BhCnQrYrA5LZm871dtMQEXeU93gmqbhdrC) is a multisignature address, so shareholders will be protected from corrupt use of the funds by the fact that a majority of the team must sign any transfer of funds.
The individuals composing the FSRT will not change without shareholders being notified. This means if the FSRT asks for a second custodial grant shareholders can be certain it is composed of the same people who are managing this grant proposal. Members of the team are not being publicly identified to safeguard their personal safety.
The members of the team will receive a combined total of 1% commission for their services, to be paid when funds are transferred according to the terms of this proposal. This means the strategic reserve will consist of 4,000,000 NBT and the commission will be 40,000 NBT.
I, Jordan Lee, believe each of the team members to be as reliable and trustworthy as anyone could be. I believe their interests are aligned with the interests of shareholders. I believe these individuals using multisignature transactions provides the best chance shareholders have at the present time to ensure this large quantity of NuBits is handled in a way consistent with shareholder interests. I still cannot guarantee their future actions, however.
Even if this grant is passed, shareholders should not regard the short term liquidity needs of the network to have been met. The strategic reserve is intended as a backup plan. It has the notable disadvantage that shareholders do not get to specify exactly how the funds will be used, because it is designed to be used to provide a fast emergency response to lack of liquidity where there is not sufficient time to discern the will of shareholders. Therefore, it is important that additional custodians step forward with specific proposals for the use of granted NuBits. This should be regarded as an urgent matter given that our daily trading volume has quickly risen well into the hundreds of thousands of NuBits and could rise even higher soon, making it necessary to bring a significant quantity of additional NuBits to market very soon. This strategic reserve fund is not the ideal way to bring that liquidity.
We have learned in the last two weeks that being an LPC is a very time consuming task at the present time. While we intend to continue developing NuBot so that is no longer the case, it seems apparent that KTm and Jamie did not ask for sufficient compensation levels (2% of the grant amount). I believe shareholders would respond favorably to proposals asking for significantly more compensation, and I encourage community members to submit proposals asking for higher levels of compensation for shareholder funded LPC operations, even as we begin our transition to self funded LPC operations.