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

[nikolaso]

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. .

[tomjoad]

someone should make a motion vote to get the PPC dividends charge to NSR in the next version 0.5.5 under Nushare/shares/ distribute dividends instead of just ppc add nsr nushares

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.

So, there is possibility to buyback NSR and share to shareholders as dividends??

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.

[GreatScott]

Burning NSR also leads to a higher price per share, which is important for our visibility on coinmarketcap.com.

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.

[tomjoad]

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.

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.

[GreatScott]

I get the feeling you aren’t familiar with the concept of share buybacks.

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.

Describing buybacks as “pump and dumps” is false and misleading.

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.

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.

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

[Sentinelrv]

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…

When will the next dividend?

To be clear, from everything I’ve read and from the discussions that I’ve had with others in the community, the complete removal of the dividends function from Nu has never been proposed, publicly or privately. In case there is confusion about it, however, I’d like to offer my take on Nu dividends.

I’m just one voice out of many, but I feel that it is important for the Nu shareholders to hear from people who have worked on the product.

> TLDR;

> Retaining the ability to issue dividends is critical. The Nu shareholders should consider themselves part of a rationale, profit-seeking enterprise.

[on soapbox]

I will not support any movement by shareholders that attempts to remove the dividends functionality from the Nu protocol. The ability to issue dividends to shareholders is a fundamental component of the system that we’ve built. Dividends, along with NBT/NSR burning, NSR buy-backs, and NBT parking[1], are valuable tools that the Nu network can utilize to grow and adjust to the ever-changing environment(s) in which it operates.

Additionally, I want to stress that I, personally, cannot in good conscience support paying dividends at the expense of NuBit users. It’s uncomfortable to be sure (especially in these early days), but if we ever want to see wide-spread adoption of NBT (or another Nu network currency unit) as a transactional token, users must be able to have confidence that they can trade in and out of them at ~$1.00/NBT without friction[2].

Nu needs to be run by the shareholders like it is a rationale enterprise. It’s not rationale for a business to offer dividends when there is no profit to distribute; therefore it follows that dividends should not be scheduled if those dividends aren’t coming out of the network’s profit.

Nu is expected to be grow over time so early profit-taking at the expense of the network’s long-term health is to me, very short-sighted. Nu shareholders need to be able to justify their investment, to be sure, and being able to predictably offer dividends is a very public way of declaring the network’s health, but please always remember where those dividends come from. I implore each and every NSR holder today to work with us develop new network strategies to devise ways that the network can generate profits. Here’s your chance to help contribute to the emergence of a different type of finanical system – one that combines the best of the current one with innovations and inventions that are uniquely possible with blockchain technology.

Long-term I’d like to see discussions about expanding the types of dividends that can be offered by the network. We’ve seen evidence already that the Nu network exhibits emergent behaviors. Being able to provide shareholders multiple avenues for investment income should exist, depending on the source of the profits–be it in a crypto token, a NSR “split” or redistribution of network acquired shares, or at some point in the future, a way of moving fiat across the network directly.

[off soapbox]

---

[1] If NBT parking has value could NSR “parking” have additional benefits to the network’s ability to operate, too? Off the top of my head I can only think of a very narrow set of circumstances where it would be useful, but I don’t see that as being a reason why it should not be considered.

[2] I should also point out that I am a believer in the Nu white paper’s statement that this peg is held at $1.00/NBT – as a measure of USD. That NuBot had to adapt to support NBT/crypto pairings may have been a necessity at the time, but going forward I believe it’s in the shareholder’s best interests to identify ways to build gateways to bring fiat directly into the system and let organic arbitrage markets develop that can cover the conversion of cryptoX into NBT.

When will the next dividend?

I agree with Ben on all the points he raised. I’ve never felt comfortable with the dividends coming from selling NuBits and don’t consider them profit. It’s just bad for the long-term health of the network and to continue doing this would be very short-sighted as Ben said.

I still think that loaning will become a huge part of the Nu network in the future. I’m just not sure how something like this would be setup. One idea that always comes to mind is that there would be Nu loan custodians that operate their own businesses whether online or more traditional brick and mortar “NuBanks”. Another example would be (higher risk but higher profit) venture capitalist custodians that are continuously able to judge what has real value from what doesn’t.

We would have partnerships with people and businesses like this all around the world and work closely with them. Somehow shareholders would be able to profit from this extended network of people and businesses. I’m not sure exactly how. That is something that needs to be explored, but I imagine shareholders would be providing some sort of services for them and collecting a certain amount of profit which can then be used for dividends. This is what I mean when I talk about REAL business, profit that has been made outside of the network through providing services and working with business partners toward their goals. I hope you get the picture.

[tomjoad]

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.

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.

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

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?

[Ben]

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

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.

[creon]

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?

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.

[GreatScott]

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.

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

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.

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?

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.

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.

Ben, you are one of the team members mentioned.

Why does Nu have NSR on the balance sheet?

The plan was discussed with Kiara, Ben and Pennybreaker before it began.

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.

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

[Ben]

Ben, you are one of the team members mentioned.

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

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?

[GreatScott]

@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.

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.

What number do you calculate the loss to be?

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.

[Ben]

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.

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.

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.

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.

[GreatScott]

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.

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

[pennybreaker]

Pump and dumps are not good for a serious project in my opinion.

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.

[GreatScott]

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).

I envision this to be something much more like large buy walls which will remain in place until gone.

Thank you both for speaking to my concerns with how NSR burning will occur. These are indeed both transparent ways of performing the buybacks. I think it would be wise to have this planned out well in advance, which is one reason I would prefer we stick with dividends at this time.

[creon]

which is the reason I would prefer we stick with dividends at this time.

Buy back and dividends are not at all in competition in my opinion, since buy back without a dividend system doesn’t make sense. As you clearly pointed out, a price increase of NSR is not to expect, or at least the normal shareholder would be unable to take advantage of it.

But if I have the same amount of NSR before and after NSR get burned, then I have a larger fraction of the total amount of NSR afterwards. This in turn will lead to a larger payout for me when dividends get paid (assuming the revenue is the same or larger).

This is in my opinion the most important question shareholders have to answer when they need to decide whether they want to burn NSR or get dividends paid: Either you take your dividend now our you speculate on a larger future dividend.

[GreatScott]

Buy back and dividends are not at all in competition in my opinion

Shareholders have passed a motion expressing their preference to perform NSR buybacks instead of dividends which was included in the motion modifying KTm’s proposal.

[creon]

Oh, so you are not questioning that buy backs could be useful in general, but you say they are not the appropriate solution in the current situation?

[GreatScott]

Oh, so you are not questioning that buy backs could be useful in general, but you think they were not the appropriate solution in the current situation?

Absolutely not. It is definitely a way of returning value to shareholders. I have concerns about the level of effectiveness and the general trends in crypto-currency trading.