[Passed] T4 Circulating NBT Threshold

[Nagalim]

Motion RIPEMD160 hash: b1ef96aed5c7f9dec482467b254b40c82bf66d23

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The threshold at which Tier 4 funds begin to be used for buying back NuShares shall be promoted to a percentage of the outstanding Nubits in the network, dubbed ‘Circulating Nubits’. The number of circulating nubits is equal to the total supply of nubits minus the nubits held in Tier 4 and Tier 6 sell side, which are assumed to be owned by the Network and held in trusted reserves.

The Tier 4 reserve shall only be drawn on to purchase NuShares when the total value in USD of the currencies held in Tier 4 buy side exceed 15% of the circulating nubit supply. The number of circulating nubits will be determined at the same time as the Tier 4 reserve percentage once a week, in accordance with the buyback motions already passed.

Additional pegged network currencies will also be backed by Tier 4 at 15%. The additional required buy liquidity should be accounted for in the appropriate units if a price feed is convenient. For example, with an all btc tier 4 buy side, the amount of btc required to hit the threshold should be accounted using a BTC/USD price for US-NBT and a BTC/CNY price for CN-NBT.

As a side note for consistency, motion a0a57d12ec67ac6816532f8a0afffd9b7ce14329 will implement a 25% threshold of circulating nubits instead of $120k should both motions pass.

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

[masterOfDisaster]

I’m very sad about the patchwork motion landscape that is currently being created.
But I’m glad that you took the initiative to increase the T4 buy side buffer, which is very important to mitigate attacks on the peg or at least make them much more expensive.

[Nagalim]

attacks on the peg

Balance Sheet Attacks

Alright, so I guess we start simple. What is a balance sheet attack? A Balance Sheet Attack (BSA) is an attempt to profit off of the logic of passed motions or fabricating situations that force shareholders to pass certain motions that can be profited off of. There are only three ways to defend against a BSA: Make the attack very expensive Make the attack require extremely large amounts of liquidity (preferably invested in the system) Make the attacker take on an extremely large risk I thi…

[Passed] 150k for tier 4 sell side liquidity (extremely urgent)

we should always keep 15% of the circulating supply of NBT in T4 funds

This motion would result in the threshold changing abruptly from the $80k now to something like (700*.15=) $105k. We now are worth several millions of dollars and are growing our NBT supply every day. We should have a bigger rainy day fund.

[masterOfDisaster]

I know. I’m well aware of that. That’s why included such a change in the draft I made 4 days ago spending hour after hour to design the idea, test it, write it down.

[Draft] FLOT and T4+6 - masterOfDisaster edition

The total amount of BTC in this multisig address shall be 12% of the total value of NBT in the wild.The introduction of additional products (CH-NBT, EU-NBT, X-NBT) will be included in a future motion.

Now I see motion after motion come and each motion tries to deal with a single aspect of liquidity providing.
Why not trying to draw a big picture instead of getting lost in dozens of motions?

[Passed] 150k for tier 4 sell side liquidity (extremely urgent)

It’s already confusing:

1. a motion to sell NSR and burn NBT
2. a motion to adjust 1)
3. a motion to sell BTC and burn NSR
4. Jordan’s draft for FLOT
5. Nagalim’s draft for FLOT
6. my draft for FLOT
7. grant for 150k NBT
8. T4 dividends
   […]
   You can start to read, discuss, improve motions that try to draw a bigger picture, or wait for the next motions:
9. motion to adjust T4 buy side to NBT in circulation
10. motion to postpone NSR buybacks

You just created 10)

[Nagalim]

There is something to be said for taking small bites and passing a non-controversial full charter once all the details have been hashed out.

I added a section on additional currencies. Please let me know if this hinders the motion, but I think it contributes to the completeness of the network.

[tomjoad]

Now I see motion after motion come and each motion tries to deal with a single aspect of liquidity providing.Why not trying to draw a big picture instead of getting lost in dozens of motions?

I’ve noticed your frustration in many recent posts that the network is introducing many motions as opposed to trying to come to consensus on large motions such as yours. It’s understandable after you have clearly spent a lot of time thinking through your draft motion with what looks to be some great ideas.

Your draft motion has at least 25 individual clauses that I counted. Each clause could be adjusted many different ways. I view it as nearly impossible for a group of dozens or hundreds of shareholders to come up with anything remotely close to consensus on a broad charter such as yours.

Small, limited motions allow the network to slowly work its way to consensus on the things it can agree on first. Over time, you’re correct there will probably need to be grander motions that unify several smaller ones. This incremental approach to decentralized consensus will still be more efficient however, as the network figures out what the contentious and non-contentious issues truly are.

As I’ve stated all along, I prefer electing members to FLOT first, and then letting them discuss their vision for liquidity operations. The elected members will bring unique skillsets, interests, and limitations to their positions that they alone will be best qualified to present.

I am grateful that people like you are thinking through the network issues in such depth, because we need thinkers to tackle the problems we face in creating disruptive innovation. I just hope you’re not discouraged that the decentralized nature of our network means that problems often need to be solved in small stages.

[tomjoad]

‘Wild Nubits’

This doesn’t quite fit our branding as a financial services product. It invokes imagery of danger, which is the opposite of what we want in a currency. How about “outstanding” or “circulating”? Maybe other ideas?

The Tier 4 reserve shall only be drawn on to purchase NuShares when the total value in USD of the currencies held in Tier 4 buy side exceed 15% of the wild nubit supply

This number feels good to me. It could be interesting to introduce a time-factor too, although that would introduce more complicated accounting for FLOT. For example, using monthly accounting, 95% of NBT revenues from any given month would be held the first month, 50% the second month, and 15% from the third month onwards. In essence, funds would slowly be released to share buyback pools or dividends after a certain amount of time has passed. Intuitively it seems as if NuBits are likeliest to be returned/sold when they are brand new (whether because of an attacker, or because of a media story causing people to try NBT out for a brief time). It would decrease the attractiveness of short-term attacks, but at the cost of increased exposure to BTC volatility which is undesirable. It’s an idea for shareholders to consider, at least.

Additional pegged network currencies will also be backed by Tier 4 at 15%.

Do you envision a T4 for each currency, or one unified T4? I admit I’m not certain which approach is better.

[Nagalim]

I’m fine with changing terminology, this was just what people have been using.

Time dependence is possible, I suppose, but the elimination of fungibility for T4 reserves would introduce a great deal more complication. Maybe a future effort could use derivatives to measure how T4 is growing and shrinking.

As for separated tier 4s, buybacks should trigger off a global sense of how much T4 btc we have total. Individual support for different currency pegs will be spelled out in other motions, but buybacks basically says “do we have enough btc to cover 15% of all outstanding debt? Use the rest as T4 overflow.”

[Nagalim]

How about ‘free range’?

[tomjoad]

How about ‘free range’?

Reminds me of eggs and chickens. I’m all for the ethical treatment of our NBT but it suggests that they might be sold for a higher price.

[Nagalim]

lol, awesome. ‘Circulating’ is fine. (if anyone has any other suggestions please speak up)

[masterOfDisaster]

I’ve noticed your frustration in many recent posts that the network is introducing many motions as opposed to trying to come to consensus on large motions

I could explain the reasons for my behaviour, but that doesn’t really help. Let me just say personal challenges cause frayed nerves. I see Nu facing serous trouble and that made me behave the way I did.

I’m sorry for having lost my patience.

I fear for Nu if it isn’t prepared for becoming as successful as all of us want it to be.
There’s a responsibility of all NSR holders for the course of Nu, but I see the work being put on the shoulders of a few hard working people here who program, do marketing and all the stuff for Nu. The number of people who actively contribute in one way or another is way below “dozens or hundreds of shareholders”.
Soon there will be the FLOT, less than two hands full of people on whose shoulders will rest an immense burden.
Thinking about being an FLOT member sparked all the text walls I created - and the frustration not seeing discussions to define the scope of the FLOT more precisely.

If NSR holders don’t act according to their possibilities, they must live with the results. That’s true in general and will be true for FLOT in particular.
I’m not going to sick my head in the sand

And if a lot of motions are better for achieving consensus, then we need to keep track of them to not get lost in the jungle.

I’m very glad that @Nagalim took the initiative to create this motion here as it’s in my opinion one of the most important adjustments. The dynamic T4 buy side together with a transparent reporting will be important for people who do background checks before they jump on the NBT train.
(as soon as the NSR markets are way more liquid, buy side reliability will be even better than with an ever increased amount of BTC - but that’s for the future…)
Adjusting the T6 sell side helps dealing with an increased demand by more NBT circulating, to mitigate a possible “landslide success”.
This is a good way to go.

I just hope you’re not discouraged that the decentralized nature of our network means that problems often need to be solved in small stages.

I’m only discouraged by seeing the democracy behind Nu being a “perfect” counterpart of the democracy some know from politics.
I wish for more contribution in politics as well, but you can’t force people to act responsibly - maybe it’s ok to be passive; I just don’t like it…
If I would back out completely I wouldn’t contribute as well as those whom I’m blame for doing that. Thinking about it that way makes it quite easy to continue!

Thank you for your patient and kind words!

[Nagalim]

This has now been hashed.
b1ef96aed5c7f9dec482467b254b40c82bf66d23

[dysconnect]

I’m only discouraged by seeing the democracy behind Nu being a “perfect” counterpart of the democracy some know from politics.

Although shareholder participation hasn’t been very ideal, I think that is an unfair accusation.

Consensus is expensive and we know that from the very design of blockchains - we require a much higher degree of redundancy compared to centralized solutions, yet we still do that for an important ideological gain. When applied to motions, that means we’ll be focusing all shareholders’ brains in one place, and make sure whatever we do is worth such cost. It is important to use shareholders’ limited energy in the most efficient ways, and I still recommend to optimize how motions are presented and structured etc. to let the network move as smooth as possible.

And we’re still at an early stage of growth where I believe we should prioritize action rather than lawmaking. Bottom line is that FLOT can’t steal money, and we establish a consensus on several well-defined situations where we can take action. A more comprehensive set of laws can take a slower pace to mature.

By the way, for my part, I called for a few public keys to test signing but the response hasn’t been great. Though I know it can wait until my scripts are usable and when the “join FLOT motions” all pass.

You have been very diligent in stimulating shareholder response on various issues, unlike my approach which is usually more avoidant - doing my own part or just something else until the issue gets close to spotlight. Yours is a very valuable approach, but it would be healthier to adjust your strategy and expectations at times.

[Cybnate]

Adding to my datafeed.

[masterOfDisaster]

I’m only discouraged by seeing the democracy behind Nu being a “perfect” counterpart of the democracy some know from politics.

Although shareholder participation hasn’t been very ideal, I think that is an unfair accusation.

We come to different conclusions, because we have different expectations.

[…]It is important to use shareholders’ limited energy in the most efficient ways[…]

Configuring votes is an important task, but if shareholders’ energy is already consumed by configuring votes or registering a data feed, they should rather look for other investments than a revolutionary startup.
I consider letting others do the work and just earning earning the credit for their work more unfair than expecting some contribution from them.

If you look at https://discuss.nubits.com/users/ you will have a hard time finding more than one dozen people contributing regularly. Depending on what you consider contribution, it may be two dozen people. As far as I remember the maximum number of NSR that could be obtained when Nu was launched, was limited to 5 million.
So there should easily be several dozens big holders and depending on who sold and who bought NSR, it could very well be hundreds of NSR holders.

Take into regard that not all in the forum who contribute are necessarily sharesholders!

[…]And we’re still at an early stage of growth[…]

Especially in that stage I expect contribution of all who have a stake in this endeavour!

[…it would be healthier to adjust your strategy and expectations at times.

I did and I still do.
I’d have expected to see some demand for seeded auctions which would solve a lot of the trouble Nu faces now because of all the received BTC. I lowered that expectation.
I’d have expected to see some demand for frequency voting or however you might call that. With the rising popularity of Nu there will be rather more than less NSR holders. I hope to have a mechanism like frequency voting early enough. I lowered my expectation to see that anytime soon.
I’d have expected to see more demand for a sound FLOT operation scope. I lowered my expectations.

[dysconnect]

I agree there should be more shareholder participation; even if it’s just about dealing with motions, subscribers of @cryptog’s and @Cybnate’s datafeed probably account for more than 50% of minting shares. But saying it’s a perfect parallel to the state of real-world democracies is way too far. What I’ve seen is that even the regular contributors are too busy to think through FLOT beyond Jordan’s motion. I’m sure yours will get more attention later; I still encourage you to aim for building a framework to assemble FLOT motions and that effort will not be wasted.

…Although if I spent more time on your motion rather typing this you probably won’t be complaining as much (guilty).

Regarding the imbalance of efforts and general inaction, what we really need is a way to get shareholders to fund projects and expand the scope of merit-based compensation. While reasonable I don’t think it can be justified on all grounds that those who have invested more should work more - they’ve already put more of their hard-earned money into the project and are arguably taking more risks.

For that reason I’m having high hopes on the establishment of FLOT, which is a gateway for cultivating more doers in the community. I also hope our community could breed more standalone business projects that have positive effects on Nubits (like BCE), as that is the ultimate source of organic growth for our ecosystem.

Frequency voting: Given JL’s recent complaint on the voting activity of shareholders, if there’s a real demand at some point it will be noticed and acted on. The main reason it’s not pushed for is that the threat is not yet imminent and we want developers to speed up progress on BCE. The culprit is still the lack of manpower. I’ve been studying the codebase and should be able to take up development work on this later; if that happens I’ll come up with a proposal to get paid for it.

Seeded auctions: I agree that the reaction of the community has been lukewarm, but the issue is more on getting shareholders to fund the project. And also there’s only one @Nagalim, who’s spending a lot of his time on ALP at the moment (and if he’s really working on auctions he probably won’t have so much time to talk about FLOT like he did)

[masterOfDisaster]

I agree there should be more shareholder participation; even if it’s just about dealing with motions, subscribers of @cryptog’s and @Cybnate’s datafeed probably account for more than 50% of minting shares. But saying it’s a perfect parallel to the state of real-world democracies is way too far.

It’s maybe a little bit exaggerated, but not way too far if I assume (and although we can’t know for sure due to the anonymity) there are way over a hundred shareholders, and only a fraction of them contribute.
The contribution is higher than in other democracies (speaking of politics now), but in difference to them this is no kind of democracy in which you participate by chance. You participate by decision instead. This is not a state you are born in which offers voting rights to adult residents. You need to buy NSR to be a part of the democratic body of Nu.
And that’s the reason why I’d expect more participation.

What I’ve seen is that even the regular contributors are too busy to think through FLOT beyond Jordan’s motion. I’m sure yours will get more attention later; I still encourage you to aim for building a framework to assemble FLOT motions and that effort will not be wasted.

Just to make this clear: my frustration was not spawned by the lack of interest in the motion I drafted - this was just the last straw after I’ve experienced lack of interest in a lot of areas which are of importance for Nu.
I’m glad that @Nagalim took the initiative to pick the maybe most important part of my draft and put it into a separate motion.
I would have done the same after I had sufficiently recovered from my frustration.
I understand that digesting small bites is easier. I try to remember that the next time I start writing text walls

…Although if I spent more time on your motion rather typing this you probably won’t be complaining as much (guilty).

You are a free person and I need to respect that you do whatever you find worthwhile as long as you don’t step on the someone’s toes.

While reasonable I don’t think it can be justified on all grounds that those who have invested more should work more - they’ve already put more of their hard-earned money into the project and are arguably taking more risks.

Indeed it seems reasonable if investors try steering the way Nu goes according to their hopes. Having put (more) money in it makes them (more) vulnerable and more responsible - they have more (at) stake!

I tried to define a scope for FLOT because I might become an elected member of the FLOT and would appreciate having a mandate that is more precise than what’s available now.
I thought about what the FLOT needs to do and when (time, circumstances) and the support by NSR holders.
And I thought that the average NSR holders should be interested in defining that was well. That was obviously wrong. I started to realize that.

For that reason I’m having high hopes on the establishment of FLOT, which is a gateway for cultivating more doers in the community.

FLOT is valuable to free @JordanLee from being highly involved in liquidity operations. This not only wastes JL’s precious time, but poses a centralized risk for Nu.
Whether FLOT can cultivate more doers is partly up to the members of the FLOT. The (future) FLOT members are already quite active. The FLOT might (need to) be able to cultivate doers outside the FLOT!

[JordanLee]

Just to make this clear: my frustration was not spawned by the lack of interest in the motion I drafted - this was just the last straw after I’ve experienced lack of interest in a lot of areas which are of importance for Nu.

I just wanted to say I love your work and the ideas you have promoted even when I don’t have time to properly digest all the details. Everyone is just very busy with diverse endeavors.

My advice would be don’t underestimate the value of hashing proposals and beginning voting as a means of getting attention. Once it gets a few percent of the vote and begins to show prominently in the block explorer then people are more willing to spend time to become familiar with it.

You are a very valuable member of the community and I would hate to see you get discouraged.

[cryptog]

Sorry if my participation was almost non existent regarding your ideas. I was having a hard time to grasp all the details. I needed much more time. I would suggest to unpack to say 5 main ideas and discuss each in a specific thread.
Nevertheless, you are extremely valuable for Nu, i feel. One of the most active and important shareholders.