The 99 cent NuBit

[matthewd]

Forgive me if this is a bad idea, or has already been considered - but why not make a NuBit 99 cents?

This idea occurred to me today, following my wondering about Tether’s viability on another thread.

What are the advantages? Nu gets one cent for every NuBit sold, which helps solve the revenue problem.

What are the disadvantages? Market buyers will be conscious that they are not getting a full dollar.

But is that actually a disadvantage? There’s no such thing as a free lunch, and market operators will be suspicious of a company that offers a dollar crypto-coin for one dollar, since Nu cannot be perceived as funding itself.

Market operators will, however, have greater confidence in NuBits if they know they are paying a commission. They will simply incorporate that one per cent expense into their expectations.

Any thoughts on this idea?

[cryptog]

This is good. This is like taking 1% of all sales.
But right now we taking much more. 60% of all sales since the reserve ratio is 40%.
Unless you want to combine both, which would give 61% of sales.

[jooize]

It’s essentially our implementation! We sell NuBits for max ¤1.005 and buy them back for ¤0.995. That generates 1% revenue in every cycle of sale and return.

100 USNBT are sold for $1.005. → $0.5
100 USNBT are returned for $0.995. → $0.5
Cycle of 100 USNBT nets $1 of revenue.

[cryptog]

where do these revenues go?

[jooize]

Directly to the shareholder funds held on exchange. On a larger scale, shareholder funds exceeding value of 40%* circulating NuBit supply flow into NuShares via buybacks at the daily rate of 0.007 * (equilibrium - assets) as specified in the weekly liquidity report. Read about the reverse in NuBits' Liquidity Model.

* 40% is a temporary minimum equilibrium.

[matthewd]

Regarding the liquidity model, I agree with JL/Phoenix that the collapse of the peg was due to human error - the Tier 6 reserve was not attempted

But even if the liquidity model is sound, why should people trust it - why should someone buy nubits, when they can buy tether, backed by U.S. banks? At the moment, people don’t trust Tether, but they trust the banks

But let’s say Tether was available at $1, and nubits at 99c. Now, there is a visual difference, and it communicates to the buyer that Nubits is “safe”. A trader or saver might split their money between them, because they get their full money with Tether, but greater security with Nubits, since Nubits now has a visible revenue stream that won’t be returned to the market. It is a matter of perception as well as liquidity

I am not expecting Nu to change, just throwing this out as an idea