[Voting] Motion to express that shareholders prefer dividends instead of NSR buybacks


#1

Motion RIPEMD160 hash: d8f15ec75da05c9446c1ab11c8d32124888fd783

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The purpose of this motion is to gauge and express shareholder opinion that dividends are the preferred method for receiving the value in which shareholders are entitled to instead of NuShare market activity. No action need be taken by any custodian or team member upon passage of this motion and it does not affect any current or future terms of any such proposals.

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Verify. Use everything between and including the tags.


When will the next dividend?
Our options to save Nu - June 25th, 2016
NSR burning instead of dividends --- why it's bad
#2

Perhaps you should consider expanding on your reasons why you believe dividends are the superior choice. Many of us believe that share buybacks are the correct strategic decision because it will lead to a much higher NSR market cap, which leads to many new users discovering us, thus creating a virtuous cycle.


#3

I posted this motion because it appears some shareholders are surprised that dividends are no longer going to get much use. Instead of taking their ball and going home, they can try and shape our Nu by voting to change that which they disagree with.


#4

Sorry, I agree with Jordan’s reasoning for why this was done. As much as I’d like to support the price of Peercoin, I feel this value should be put back into the network itself, rather than an outside asset where it leaves the network entirely. This change was designed to help protect the peg. The two points mentioned in Jordan’s post is how I feel Nu should have always been setup.

This however doesn’t mean that dividends will never be used again as I talked about in the other thread. I agree with Ben here…

We need to figure out other ways to use our network to make profit. That shouldn’t include leaching on profit from NuBits sold. It should be real profit from real business. We need to identify ways of doing this, just as any centralized business would do the same.


#5

You will not be able to assure shareholders that everyone got equal value returned to them through buy backs. There is nothing stopping the custodian or the team members who are in close contact with them from treating it as if it was a good old fashioned organized pump to optimize their returns. Burning NuShares will have a hypothetical positive impact on the price, but none of us here can predict markets enough to be sure it will be effective. Dividends are real and transparent.

EDIT: I am not trying to say the only way this could be exploited is if the team or custodian acts in any particular way. Outside forces will also exploit the buyback program as we will indeed all see it coming.


#7

So, there is possibility to buyback NSR and share to shareholders as dividends??
This would lightly support price and in my opinion it is best and simplest option instead of burning. .


#8

The Nu design (and all equity systems) requires an external asset to distribute dividends in. For traditional equity like Apple shares, dividends are distributed in USD or EUR. For NuShares it is PPC.

Doing a share buyback and then burning NSR accomplishes the same thing and requires no additional protocol changes. Burning NSR also leads to a higher price per share, which is important for our visibility on coinmarketcap.com.


#9

There is no way you can say such a thing with any amount reliability. Pump and dumps are not good for a serious project in my opinion.


#10

I get the feeling you aren’t familiar with the concept of share buybacks. It is a conventional wealth distribution tactic used by many of the world’s largest companies (including Apple, which has used it frequently) to return value to shareholders. It is especially useful in periods where shareholders feel that the stock is undervalued, which many of us do for NuShares.

Here is a great introduction to the concept of share buybacks: http://www.investopedia.com/articles/02/041702.asp

I agree that dividends have their place in Nu’s future operations. Right now however, I believe share buybacks will do more good for the Nu network than distributing dividends. Describing buybacks as “pump and dumps” is false and misleading.


#11

Thank you, but I am confident in my knowledge on the topic. There is no way you can predict how markets will react. Especially a market as thin as NSR.

Shareholders should get value returned to them with share buy backs, but it is not certain nor a guarantee. Just as block reward halvings are thought by many to increase the price, people are always wrong and get burned trying to outsmart the market. I truly believe these will have the same effect as a pump and dump. Think what you want, but the team has not laid out nor addressed any concerns I have made about how these will occur.

How much money has the team network lost already trying to predict the NSR market?


#12

I just wanted to quote these two recent posts from the other thread in case they haven’t been read, because I think they’re important…


#13

Could you explain more what you mean by this quote, and how a hypothetical attack might play out?

Are you are referring to the possibility of someone placing a sell order for the entire buy-back amount at the current price of NSR in order to “steal” the entire amount?

It seems as if that tactic could be mitigated simply by announcing the buyback window well in advance. If a custodian declared that on April 7, 2015, buybacks would happen sporadically throughout the 24 hour period, every shareholder could place sell orders if they wanted to, or instruct their own NuBot to always have a sell order at the top of the order book. The benefit of inside information would be greatly reduced. I’m not an expert on this however, maybe others can chime in.

I don’t understand this comment. Are you referring to Nu custodian @Jmiller hedging against BTC loss with NSR purchase? He provided clarity on his decision here Why does Nu have NSR on the balance sheet?


#14

Who are you referring to by “the team” in your question? I’m not aware of any NSR speculation that has occurred by the Nu product team in any official capacity. Individual, personal trading, sure, but Jordan Lee is the only one involved in NSR distribution and I find it hard to classify that as relating to “market prediction”.

If you’re thinking of @jmiller’s short-lived hedging strategy, remember that custodians are not part of the Nu team, they are part of the larger Nu community. Any losses in that case would be limited to whatever funds were put into it. Last time the topic came up I looked at the valuation and it was something like ~3600 NBT (~600,000 NSR @ $0.006/NSR; a month or so ago when it was reported).

Assuming it is recoverable from BTER those ~600,000 NSR @ $0.003/NSR are worth ~1800 NBT, so I’ll answer “a loss of ~1800 NBT in shareholder value” to your question.


#15

I also thought about that and honestly I would always prefer a proposal where the custodian proves by signature that he or she already possesses the amount of NSR to be burned.

Maybe the share buy back can also be implemented similar to the parking system: shareholders vote on a particular amount of NSR that should be burned for a certain compensation (like parking duration and rates).

Everyone then can decide to take this offer and buy NSR from the market at any time, or use own NSR, and transform them immediately into NBT using the client. And it will be very hard to trade against one particular trader.


#16

Yes, @Sentinelrv those are all good points. I agree that distributing the proceeds from NuBit sales was not a very good idea. I also realize that the network is not likely to return any value to shareholders for some time. But how are these two points relevant to the discussion as to whether dividends or NSR buybacks are the better option? There is no need for buy backs. It does not solve either problem mentioned.

Ben: Hey, Jamie, how is the NSR purchases going?
jmiller: Good, Ben, we are about half way through the $50,000 purchase.
Ben: Awesome, the orderbooks are empty, it’s like nobody wants to sell!
jmiller: Yes, we are not going to get many NSR out of circulation, but CoinMarketCap sure is looking good at this moment.

At this point, Ben has knowledge that is valuable to any NSR trader or shareholder looking to benefit from this buy back. Everyone wants to sell at the top, obviously. He can now estimate when the pump (or profits in which all shareholders are entitled to) is almost exhausted. Alternately, jmiller could use this information to their own advantage without anyone knowing. Surely this information is not going to be public, though maybe it should be in the interest of transparency.

Maybe you can find where anybody mentions how much of the buy support BTC was spent on NuShares
and then we can do the necessary math.

Ben, you are one of the team members mentioned.

I am positive the amount of BTC lost as a result of the NSR price crash is a few hundred percent higher than 1800 NBT


#17

@jmiller brought it up, yes, and asked for my opinion. I do not feel that it makes me a party to the actions because there was never a directive given (nor could there be). I have no more access to Jamie’s accounts than you do.

Custodians routinely discuss Nu- and NuBot-related topics with the product team; hopefully that doesn’t come as a surprise to anyone.

I don’t follow. From what I’ve read on the forums, NSR held on BTER is actually available for withdrawal. Had the BTC that @jmiller converted into NSR been left in BTC they would be lost along with the rest of the BTC siphoned off during the theft. The valuation I used is based on the 50% drop in NSR value since the theft occurred and BTER’s market for NSR dried up vs. today’s price.

What number do you calculate the loss to be?


#18

If you read jmiller’s response, there is no way for myself to know how much you were involved. It sounded like you vouched for the plan. When I was asking the questions to jmiller you seemed careful not to disclose anything about the hedging plan, so when jmiller mentioned you I was left to imagine. Though I tried not to be accusatory to the best of my ability.

I have not been given enough information to calculate this, which shocks me that I seem to be the only person curious about it. All we have been told is approximate dates in which the NSR was purchased.


#19

And that’s definitely a fair assumption, given the information you had at the time. I didn’t read your response as accusatory, and I hope I didn’t come across as confrontational in my response – internet postings tend to lack the nuance that verbal conversations have.

Knowing the dates should be enough, shouldn’t it? BTC exchange rates on a given day should be straight-forward to extrapolate what the paper loss would be.


#20

The “last week in January” had many price combinations between NSR/BTC and BTC/USD.


#21

A pump and dump is a deliberate price manipulation tactic designed to solely benefit the attacker(s) … A buyback and burn is quite different. I’m quite confident that Jordan cares enough about this project to not do anything reckless like buy up the whole order book to pump the price. I envision this to be something much more like large buy walls which will remain in place until gone. If this causes the public to panic buy above the walls, a “pump” in value might be observed, but with no dump to follow unless large holders decide to voluntarily sell. Even if that were to happen, selling would have to exceed buying for price to “dump” … this is extremely unlikely. If holders were willing to push the price down further than where the buying starts, we would already be seeing much more aggressive selling right now.