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.
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.
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.
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?
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.
Look at this comment on random reddit post about Nu: https://www.reddit.com/r/CryptoCurrency/comments/30hj5h/what_if_i_had_50000_nushares_what_could_i_do_with/cpsu00l
What is this? A troll? A BitShares guy?
That is reality.
NuShares have no value, at all. They are dead asset, they are valued only on paper. There is no way for person holding NuShares to exchange them, there is no liquidity on markets. Nu has entered downward spiral, and it needs to break this magic circle of downfall. Share buyback is best solution I can think of to bring new life to Nu, no matter how much I would like to see another Peercoin dividend or how much I want Peercoin price to go up.
In past two weeks I have handled IPO for Teehe project. Most of applicants obviously came from Peercoin and Nu community. What they have told me is that they wish that Peercoin was worth more, and they have entered Peercoin at triple or quadruple prices than are today. I imagine this is the way things are for most of us here.
Also, a lot of people asked me to if it is possible to invest in NuShares. Why did they ask that? They have asked it because NuShares have no value, and they can not get NuBits or Bitcoins/Peercoins for them to invest in Teehe. They are stuck with worthless NuShares at this moment.
People are holding dead weight, you must realize this. Many community members have invested too much into Nu, they have invested because they want Peercoin to succeed; they want Peercoin dividends. But before that, NuShares have to become wanted again for Nu to succeed, otherwise this community will start to dissipate and “experiment” will fail - which will hurt Peercoin too.
I think that’s completely untrue.
The Nu network has maintained a stable peg for over half a year. The quality of our primary product NuBits has not changed at all. Once new exchanges begin adding NuShares trading (after we release our source code), liquidity will resume. Daily NSR trading volume is only about 2000 NBT per day right now, or about 0.1% of total supply. Anything under 1% in traditional equity is just considered random noise.
You have missed my point.
Do not use filler answers in this topic, we all know what Nu is and can repeat “1% of total supply per day” in our sleep.
Most of the NuShare price decline has occurred after shareholders passed a motion moving dividends to the back burner. I am not saying that this is the sole reason, but to say that allowing for NSR burning is the only thing that can save Nu is just inaccurate.
Not true, decline has occurred after initial hype was over. Which is classic for all cryptocurrencies.
Most of decline has come after Nu experienced those hacks and thefts.
The point is, we already have NSR burning and it is not helping anything at this moment. It is not the answer you are looking for.
Burning is not related to this.
This is the answer we are looking for.
Furthermore, speculation of future dividends have an effect on the current market price. This is a fact. It will be much more complicated to speculate on NuShares now as buybacks are the preferred method of returning value to shareholders as nobody knows how low the NSR price will go before a buyback is a possibility.
[Passed] NSR sale and NBT burn
This is quoted from Jordan’s plan when there is a big demand for nbits:
It is quite possible that there is so little NSR liquidity it’s not possible to buy NSR with the proceeds at any sane prices in a reasonable short period. We expect shareholder to sell share to absorb the price surge. But people tend to hold when the price goes up! Now this is when dividends in PPC could come to the rescue. The proceeds could be used to purchase PPC which has a much deeper liquidity pool, and distribute the PPC as dividends.
There you go, buyback and dividend are both needed in different situation.
Wall Observer - NuShares price movement tracking & discussion
This is precisely the problem I envision happening. People will panic sell when the buy back program is over, including outside investors who only got into NuShares to attempt exploit the buy back program.
I still see no reason that buy backs should take preference over dividends.
Unnecessarily diluting such a small market with too many unbacked NuBits is a reason. Quite frankly, the case has been well made for why we really need to see additional market growth before more dividends are issued.
I liked your OP because I appreciate the discussion and I disagree with some of the language that I have seen that suggests dividends should be completely replaced with buy back. I am not voting for your motion because I disagree with the language that says dividends are the preferred method. I would like to see both used and I would like to see a more tangible decision about what criteria would need to be met for dividends to be a healthy choice. Presenting a reasonable idea of when to expect this is something I believe potential investors need to see.
Please elaborate what market will be diluted with NuBits if shareholders prefer dividends.
I am not proposing dividends any time in the near future. I am saying once we figure out how to make a profit, it will be distributed as dividends. That is unless a motion calls for share buy backs for some reason. I do not think the case has been made to have share buybacks be the default position.
Every NuBit sold for Peercoin is a NuBit that is no longer controlled by the shareholders. This is dangerous in a market as small as the Nubits market because we need to be a solvent as possible until this thing really catches on.
Cool. Me too.
I was little concerned about this too but it seem that most of the opinions expressed in this thread do not believe this to be the case. I’m glad to see the conversation.
Using BTC/USD liquidity as buy support for NBT/BTC
Judging by a few of the comments about this issue that bring up “helping Peercoin”, I think the Peercoin price fall may be a large motivator for, seemingly, nobody taking the side of dividends anymore. It was a pretty big deal the first few months of NuBits that dividends were a brilliant and efficient way of returning value to shareholders. I remember the tweet about the first dividend transaction and it was indeed an amazing thing for DACs and Nu. It was said that Peercoin was chosen because PoS is more secure, not because NuBits had a lot of Peercoin holders.
If this is the case, and the Peercoin market is affecting your decisions on this, then you just do not understand how volatile markets work. The only thing you are trying to do to NSR is what you tried to do for PPC, albeit not very long. I must say that I feel it is pretty disingenuous on a couple levels. I do not come from the Peercoin community and I did not invest in NuBits so that it will benefit seemingly unrelated investments of mine. You should not be making decisions about Nu based on what happens with other volatile markets. And NuBits customers should not have to rely an any volatile market, be it Peercoin or NuShares (Tier 7 liquidity).
[quote=“GreatScott, post:41, topic:1822, full:true”]
I think the Peercoin price fall may be a large motivator for, seemingly, nobody taking the side of dividends anymore.[/quote]
This at least isn’t the case for me. I’m still buying Peercoin, especially now that it’s cheap.