Protocol Level Burning of NBT in Exchange for NSR at Dynamic Rate Similar to Park Rates / Voting

You can make seeded auctions a button press for end users too. Simply type in how much you want to submit (optional: at what price, if you have both nbt and nsr) and hit go. The issue is that it has a dev cost, which is why it hasn’t been implemented.

I’d like to do this right now and see how it works as an end-user. Where is the auctioneer right now?

I also want to better understand where the nsr / nbt come from, this is a peer to peer swap auction correct? If there are no other participants, nothing happens correct? I have to register addresses, understand coin control, even as a technical person looking at the existing documentation / implementation i have some questions. friction friction friction.

if we can’t implement a simple idea such as this, we may as well all go home.

Also would like to make it clear that i am not attacking or berating your idea at all, i think it is valuable. so please do not take the wrong way.

So you’re looking at the proof of concept, not the embedded blockchain auction. The embedded version has Nu submit either NSR or NBT to each auction based on shareholder voting. For the clients, it just means burning NSR or NBT or both with a special tag, then you receive the funds at the priv-key symmetric address.

Yours has people burning NSR or NBT with a special tag to receive funds at a priv-key symmetric address, just like mine. Yours also has to have a blockchain vote on NSR price. These things are just as complicated.

Ditto. Constructive criticism.

All i can say after spending another few mins reading through your thread. Is that these are two different ideas.
Admittedly i still do not fully understand it so if i make assumptions please correct me.

Your peer to peer aspect and the concept that there has to be participation for it to work is more friction, just understanding it is friction. The fact that i’m not guaranteed to fill at my price is friction. (or at all? ) The fact that there isn’t always an auction is friction.

The reason why Nu is in this boat (let’s forget about buy backs for a second and look deeper) is friction.

The liquidity engines main enemy is friction.

Nagalim is saying that you could be an auctioneer right now. Just fire up his software and your wallet and go. Post addresses to this forum and we have an auction.

Nu can push NSR to the auction and burn received NBT.

I can’t do it now b/c I’m at work and have no access to my wallets.

yeah i realize all that…

manual processes (friction) every step of the way…

We can do it the way you like, it would certainly put in most of the code necessary to do seeded auctions in the future. I would suggest some kind of a cap on how many nsr can be minted, as this could easily be used to generate significant stake and overpower the network, allowing you to lower the price and generate even more stake and basically take over, then spike the price back up before other big players can react significantly. (Especially at the current mint difficulty)

Yes, there are a lot of manual processes. They are what we have right now.

If someone wants to provide that much liquidity to the NBT market as to try and take over, it did it’s job :wink:

If there is that much liquidity shareholders would vote the swap ratio lower as it is happening. We don’t want a high ratio if our liquidity needs are met.

I don’t see this being an issue.

That is why i am proposing something new…

Agreed. There’s a lot on the TODO list for when we have funds.

This is not so much of a “todo” list item, this is a “try to save nu” item. Or at least give it another tool to try to save itself.

I am not really up to date on all that is pending. What other protocol saving ideas are waiting for funding?

Im worried about the nbt on the market now. We open the flood gates, people trade nbt for nsr at a higher than market rate, driving the share price down further.

What you’re seeing here is an additional nbt use case of burning them directly to participate in liquidity balancing. I support the hell out of that. I’m just worried about the economic implications on the PoS security of allowing free transfer of nbt to nsr. There’s theoretically a particular nsr price att which if the nbt currently on market went through the auction and started minting it could take control of the network overnight.

shareholders set the swap rate via voting.

if all the sudden there is demand for 100’s of k of NBT on the market… well… we should be selling it…

If we are selling it, share prices are going up, If i am a shareholder and the swap rates are favorable to me, i may offer nbt liquidity too.

Bottom line is, if there is NBT liquidity, NSR prices go up, swap rates go down, it’s all very self-regulating.

Yes there is a “theoretical” limit here in regards to pos danger, I just don’t see it happening. Maybe someone could model it out. I think that it’s self correcting as is though.

If there are about 250 mil nsr minting, you only need about 75 mil to mess with the network. At a rate of $0.001/nsr, this is 75k nbt. So anyone with 75k nbt can take over the network. There are about 700k nbt in circulation.

I was wrong about the overnight thing though. You’d have to wait a week for the shares to start minting. At least the attacker increases the difficulty somewhat during the attack.

Youre probably right, that these arguments are far fetched because they depend on a big single actor. And they go away when Nu is healthy with high difficulty. Just pointing out the thought process that led to seeded auctions as a means of throttling nsr creation and responding to network forces more intrinsically than by blockchain vote.

Yep, but you do have a very good point and i was just trying to think of a possible solution. This would work a lot better if we were starting from scratch, or we did some kind of rebalance with NSR in some way. (i don’t count a rebalance of NBT as a possible solution)

One thing i just came up with is, double the NSR dilution, give the original to the buyer of the debt equity swap, take the other “half” and divide it equally among the solvers of the last 100 blocks.

You would definitely see mint rates rise!

Would like to hear @JordanLee opinion on this… as well as anyone elses!

I want someone to set this up. I’m more than willing to burn some of my NBT for NSR. But I don’t have the time over the next few days to do it.

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