Three roles that need to be filled by shareholders


#1

As many of you are aware, I am obligated by shareholder motion to burn the 172 million undistributed NSR that remain no later than October 24. I advanced the motion and choose the deadline to be 60 days after the protocol permits NSR grants. The reason I did this is so shareholders would be able to pass an NSR grant to a multisig based group for use in maintaining the peg in extreme circumstances. Under normal circumstances interest rates should be used first to maintain the peg, and NSR sales combined with NBT burns should only occur when there is prolonged use of interest rates. Such NSR sales are not urgent and time can be taken in setting them up. However, it is possible that in the case of a very rapid drop in demand for NuBits, that both interest rates and rapid NSR sales combined with NBT burns would be needed to maintain the peg. Having the ability to quickly use both methods at any time increases the strength of the peg and confidence in it. So even it will rarely be needed, it still brings a lot of value to the network. Therefore, before all the undistributed NSR is burned I would like to see an NSR grant in range of 20 to 40 million NSR, preferably to a group of trusted community members using multisig. Rules should be set up to govern the use of those NSR for supporting the peg. For instance, it might make sense to require that they be used when less than 25% of all liquidity is buy side, and only then.

We also need a group to hold NuBits using multisig that can be injected into the market on very short notice in order to protect the peg with downward pressure. Whoever does this needs to formulate rules for when NuBits would be introduced into the market, such as when the sell side is less than 40% of total liquidity. They would also need to propose rules for using funds raised from NuBit sales: either as dividends, for development or NSR buy backs and burn, or a combination of those. It is possible that FSRT (First Strategic Reserve Team) could take on this expanded role using the NuBits that have already been granted to them. As an aside, there is a consensus that most of the NuBits in their possession should be burned, as the amount is far more than would ever be needed over a couple weeks. Expect a motion on this soon.

Thirdly, there is a need for a multisig group to hold tier 4 liquidity. We probably won’t need this forever, but it will be needed at least until B&C Exchange escrow features support enforcing contracts for long term liquidity provision. Right now tier 4 liquidity consists of the only liquid cryptoasset that isn’t our liability: Bitcoin. I would like to see this maintained at around $80,000 of value at the present time.

With interest rates, the ability to very quickly sell NSR and burn NBT, $90,000 in tier 1 liquidity, $40,000 in tier 3, around $70,000 in tier 4 buy support and hundreds of thousands of NuBits available for sell side pressure, we can be quite confident in the reliability of the peg.

These changes will further decentralise the network. There isn’t a need to depend on me to fulfill these three functions. In fact, I’m confident others will do a better job. Complete liquidity figures ought to be available in real time for tiers 1 to 4. I only gave information on that at intervals of weeks. Also, I’m sure my time would be better spent on tasks related to architecture and core development. When the network began, there were so few of us and so many jobs to be done, that we each had to wear a lot of different hats. Now there are a significant number of people involved in liquidity operations and other aspects of the network that can readily perform these roles to a high standard. So, it makes sense for me to stop playing roles that are outside my expertise and which constitute a degree of centralisation.

If you are interested in serving in one of the roles described and have questions about it, feel free to ask me. This is a call for people to step up and replace me in holding NSR, NBT and BTC for peg maintainence purposes. Once the transition is complete, the only shareholder funds I expect to keep holding are development funds in the amount of 50,000 NBT or so. I’m intent on seeing others step up to fulfill these roles, so if no one does in the coming days I will likely provide incentive by requiring an increasing rate of compensation for performing these tasks myself. For instance, I might say that I will only provide these services for a certain fee beginning in 60 days. In 90 days, the cost will be 2 times as much, then 3 times as much after 120 days, and so on. The point of such a proposal would be to make my work in these areas uncompetitive, so that someone will step in and replace me. Hopefully that isn’t necessary.

I’m interested to see what you all think of the three roles I have proposed here, how they should be structured, and who should be cast in the roles.


132 million undistributed NSR just burned
NuRiver Pool on Cryptsy for NBT/USD & NBT/BTC
[Passed] Liquidity operations compensation
[Passed] Motion to begin NSR buyback immediately
Smoking Draft List - October 20, 2015
Can someone explain me what FLOT and FSRT are?
Tier 4 Fund Management Discussion
[Passed] Liquidity operations compensation
[Passed] A grant to make NuBot work with Liquidity Pools
Monthly P&L of Nu
Next week, Nu will be 1y old. What did we achieve?
#2

Did you mean upward pressure, since injecting more NBT will push down its price.

What does it take to be one of the multisig holder? I have never used multisig before. Some specified requirement would help. for example

  1. receive the fund by doing so and so
  2. keep a client ready to send within N hours.
  3. read the forum for action notice once N hours.
  4. once needed to act, open the client, click this and this…

A great thing to do is updating the White Paper. A cohernt and up to date view of Nu is quite difficult to get now for anyone who doesn’t follow the forum closely. I agree with almost all points of the vision in this post and think they should go to the White Paper.


#3

I think the very first step should be to decide candidates for each of the groups. Once that is decided, each sub-team can propose the rules that will govern their actions and allow shareholders to vote on it through motions. The suggestions I read above seem reasonable. I would strongly support having the FSRT team continue on with managing the reserve of NBT that is held in the event of a demand surge.

I would prefer seeing at least 4-of-6 multisigs set up for each group. Anything less would not only introduce greater counterparty risk, but also place unreasonable demands on signers’ time. For example, in a 2-of-3 setup it would be impossible for any two signers to take a vacation at the same time.

If needed I will volunteer to be part of the multisig group to hold Tier 4 BTC liquidity. I can privately demonstrate to @JordanLee that I have purchased a significant amount of NSR and am a low risk to steal from the network.

One question is whether it would be better to split the groups into two rather than three:

  1. Buy-Side Custodian Group
  • $80,000 worth of BTC (Tier 4 Liquidity)
  • 20-40M NuShares for emergency sales (Tier 6 Liquidity)
  1. Sell-Side Custodian Group
  • 500,000 NBT in reserve (Tier 4 Liquidity)

The advantage of this approach is that the Buy-Side Custodian Group can coordinate actions amongst themselves, such as using a small amount of Tier 4 BTC funds while coordinating a future NSR sale. This will prevent duplication of actions, or worse yet delayed responses during a crisis.

Reference: Finalized evolution of liquidity operations


[Withdrawn] Motion to lower compensation for NuLagoon sell side
BitUSD, Tether and NuBits compared side by side at BitDeposit.org
[Draft] FLOT and T4+6 - masterOfDisaster edition
#4

I would be willing to contribute to either 1) or 2) as a multi sig holder to help Nu decentralize further its operations, depending on the conditions/tasks/constraints.


#5

That would be great

Nu seems to be able to decentralize atomically every task of itself - great to see that potential.


#6

As a nushareholder from day 1, I am interested in being a multisig NSR grant holder for emergency purpose.


#7

Since some of the tasks here require quick reaction from the trusted parties I think it could be useful to have some advanced means of communication established between the shareholders. For example, instead of relying on the forums we could have texting on the nushares/nubits block chain with SMS alerts to the subscribed parties. That way one is not obliged to constantly poll the forums but can instead be away from the computer for a longer period of time and get an SMS when their shareholder actions are needed (signing, voting, upgrading the client and so on).


#8

a number of community / dev team members hangs around here:


#9

Not having my questions above anser I guess I can be a signer. I usually read the forum often but can be unavailable for a couple of days with short notice.


#10

I have no great idea of the fee I would request for a task such as Holding NSR for emergency Peg maintenance.
@JordanLee May I ask you what your fee was? (and for the other 2 tasks too)


#11

I just posted this draft motion, which is quite relevant to this topic. It makes action more urgent and will allow people wanting to fill these roles to feel confident in asking for compensation, as whatever they ask for will be less than what I require.

We need to talk about who is going to be involved in which role and what compensation will be per person.


#12

If I’m selected to any of the groups above my requested compensation will be zero. These roles will require some initial discussion around governance but won’t require regular daily or even weekly duties. As a NuShareholder it is in my interests to have these roles filled (and for little cost), so I hope to set a precedent by declining compensation.


#13

I would also be willing to sign up for 1), with up to $10000 in BTC for Tier 4. And my fee would also be zero.


#14

You guys are undoing what Jordan tries to do.

I am willing to join the group and take some fee as it will probably make me feel more responsible, although my main concern is, as I have asked in this thread earlier, what is the requirement/qualification to be a member of the group?


#15

what is the requirement/qualification to be a member of the group?

I guess this boils down to a shareholder vote. We can lay down the specifics as we go on, so the bottom line is that first candidates need 1) enough trust and 2) be conscious with designing rules for the role. As for (1), it is going to operate under multisig, so I don’t think you need the trust level of @JordanLee. For (2), it is better to choose people who like to consider expenditure and regulatory practices, and perhaps with some ability to code and automate parts of the responsibility.


#16

I also volunteer for whatever is needed free of charge. As long as it doesn’t require huge amount of time per week or a high level of technical ability (Setting up a TLLP was technically a lot more complex then I felt comfortable with) .


#17

I’ve not seen a formal answer to this question, but to me it makes sense to make this split.

These are questions which need to be part of the discussion as they should be in a final motion as well:

I’d like to add another question: do these roles necessarily need to be filled solely by shareholders?
It’s obvious that they have an incentive to fill the role.
But does that mean being shareholder is a requirement?


#18

I can also be part of the signing parties. Take me into account in forming groups


#19

So for a quick oversight of volunteers so far:

We have 3 people that volunteer and are willing to do it free of charge:

@tomjoad
@nmei
@Dhume

We have 1 person that volunteers and asks for a small fee:

@Mhps

And 3 people who volunteered but have not yet specified if they would like a fee or not:

@Cryptog
@Crypto_coiner
@Desrever

Maybe it’s time we start forming an consensus of how many groups (3 as Jordan Lee suggested or 2 like Tomjoad suggested) of people we need and how many persons need to be in these groups.


#20

I’ll throw my hat in the ring.

I’d prefer my services in exchange for a (small) fee – to set precedent with there being some value in servicing these roles, and establish a concept of consideration.

Regular small payments / grants (even 1 NBT or equivalent NSR) could also be used to determine / assert / record in the blockchain who is ‘in’ and who is ‘out’

My preference is for 2 groups – so the same team is coordinating intervention on each side. i.e.: what confusion could be created if both tier 4 and tier 6 are mobilized, and also the movement of funds between tiers (where possible)