Nbt price is replaced virtually by central reserves. In this way, Nu attempts to avoid direct nbt supply inflation and deflation as a response to changes in demand, and instead uses a central reserve.
If reserves are under target:
Nsr is sold for btc, which is added to reserve
If reserves are over target:
Nsr is bought for btc, which decreases reserve
1. Btc price fluctuates, causing the virtual nbt demand to fluctuate and cause fluctuations in the perceived reserve-target ratio.
2. Nsr price fluctuates, causing a direct spread loss when adjusting reserves closer to target.
3. Blockchain costs (mint rate)
4. Employee costs, etc.
1. Nbt spread
2. Blockchain fees
Let's dismiss blockchain fees (P2) and costs (L3) as negligible.
Nbt spread is ~1% on txns, BTC daily volatility is ~5%, nsr daily volatility is >20%.
Nbt volume is ~$500/day. Interaction with reserves is ~$100/day.
Simplest quantitative model (neglect btc volatility):
Loss = $100*0.2 = $20/day
Profit = $500*0.01 = $5/day
Conclusion: Btc volatility directly affects reserve value, so therefore requires a statement about the size of the reserve. Without even considering this loss mehanism, Nu operates at a loss of ~$15/day.