A stable digital currency without centralization and with deep backing capabilities takes more engineering than a purely reserve-based stable currency. Centralized stable currencies can store full reserves in the fiat currency they peg to while holders must accept the counterparty risks of a traditional business, banking system, and applicable government. Transparency in a centralized model is as of today not available to the degree made possible by blockchain technology.
NuBits is a system where liquidity initially enters by sales of currency token and revenue from spread trading (measure trading volume). Proceeds are kept in reserves by trusted custodians of the network, and as is one critical difference from most alternative models, part of the reserve is distributed to shareholders over time via NuShare buybacks. Purpose is to create an incentive for investment in the network when demand for NuBits declines. Relying entirely on the value of reserves is not viable. A major reason of the high demand for stable cryptocurrencies is unacceptable volatility of cryptoassets. It would be irresponsible to only hold cryptoassets for the full reserve value.
- Sell NuBits for $1.005. Back NuBits at $0.995. Generate profit from trading volume.
- Maintain sales and revenue proceeds in immediate reserves, the asset reserve (Tier 1–4).
- Determine value of asset reserve and calculate deviation from equilibrium threshold.
- Progressively spend funds on NuShare buybacks at a slow steady rate.
- Shareholders have the ability to offer park rates (Tier 5), i.e. interest for NuBit holders, which can stimulate demand of NuBits. Most effective with multiple NuBit markets (USNBT, CNNBT, …).
- As Tier 6, NuShares can be issued by shareholders and sold to back circulating NuBits.
We have always been honest about the backing mechanisms for NuBits.
Partial revenue is distributed to shareholders to create a mechanism for deep backing by incentive for investment in Nu when NuBits leaving circulation exceed the value of Nu’s cryptoasset reserve. Full backing of NuBits by design relies on investors purchasing new shares (NuShares) from the issuer.
— https://en.wikipedia.org/wiki/NuBits
Primary issue in the execution of our liquidity model is a lack of markets for NuShares and the low awareness among investors. Bittrex lists NuBits but not NuShares. Liquidity differences in the markets of NuBits and NuShares are expected by the model to be much smaller than they’ve been, and it is likely they can be. An enormous amount of cryptoassets trade with higher liquidity than NuShares. It has been a marketing failure of NuShares.
Sorry that you have to be concerned for your money. Liquidity Operations will keep performing NuShare sales and make listing of NuShares on more exchanges the absolute top priority it must be, along with marketing.
Although it is a stressful situation, NuBits can be successful with continued hard work. Last year we successfully backed the entire circulating supply of NuBits using only NuShare sales.
