[Passed] Temporarily cap NBT supply with full reserve

[Phoenix]

The liquidity engine cannot operate without a peg. Therefore, our first priority needs to be the establishment of a peg. It must be one the market will have confidence can be defended. $0.10 can be easily defended, implying a total money supply of around 70,000 USD.

At this level it will be easy to re-establish NuBits as being backed by full and transparently provable reserves (such as FLOT funds). We utilize the NSR buyback/sale calculations that have been established including the Standard, but change it to require a full reserve.

If the Standard is positive (more than 100% reserve), the peg level gets raised. Through repeated raises in the peg level, the peg returns to 1.00 eventually.

This plan is extremely straight forward and easy to implement. It has only three immediate action items:

1. All liquidity providers peg NBT to $0.10

2. Change the Standard calculation to require 100% reserve.

3. Change NuBot and PyBot to feature a setting for the peg level.

I will be raising four motions: one to mandate a peg level of $0.10, a second to change the Standard calculation to require full reserve, a third to regulate how the peg will be raised in the future to eventually return to $1.00, and a fourth to place a cap on NuBit money supply until the peg is restored back to $1.00.

Essentially, we peg at $0.10 right now. As NuBit demand increases, we don’t issue additional NuBits, we lift the peg up as a one way ratchet. Once the peg is restored to 1.00, the NuBit money supply will expand again, but this time with full, provable reserves. We will also need a cap on the rate of NSR sales, if the recovery of the NBT price outpaces the gathering of reserves.

The most urgent consensus that must be reached by shareholders is the current peg level, so I will advance that motion first.

This motion is being withdrawn because I now favor simply purchasing NBT with NSR sale proceeds. I eagerly support the other two that require 100% reserve and a cap on the NBT supply.

“Establish NBT Peg at $0.10 USD” available at Daology.

Motion hash: a26f6661ced949166227019f0ee64afe98f7e6b0

Liquidity providers of all kinds shall immediately defend an NBT peg of
$0.10 USD. If it is apparent this motion has support, liquidity
providers are encouraged to comply before passage has been finalized.

The second motion I mentioned, 100% Reserve Required For NuBits is shown here:

Motion Hash: 470ba7bf40099c395b8fb569367d16ce6167c2bd

The script underlying the output that is the focus of this thread:
Supply, Reserves, and Equilibrium
shall be changed to reserve 100% of outstanding NuBits instead of the current figure of 15%.
A maximum of 0.5% of the total NuShare supply may be sold each week.
This maximum applies to the aggregate NSR sales by all custodians.

The third motion I mentioned, Plans And Regulations for Peg Adjustment is going to be complicated and difficult to finalize properly. I have included some exploratory text in the draft as a start:

This is draft is quite preliminary and should be regarded as to be an
exploration of the items or aspects that should be the subject of peg
adjustment regulation.
The objectives of peg adjustment regulation are:
Increase the pegged price.Coordinate the change among liquidity so that there is unity about the pegged price at all times.Prevent any losses being imposed on liquidity providers. Consider an
increase in a peg of 10%. If this were announced to occur at a specific
date in the future, speculators would purchase all NuBits at
established price before the official increase, then sell all NuBits
back to liquidity providers once the official price was increased.
Liquidity providers would lose the 10% increase. This suggests changes
need to be small and not planned out too far ahead.

The fourth motion I mentioned, “Temporary Cap on the NuBit Money Supply” is available here, and is shown here:

Motion Hash: f8b9e060dc73a97fd28a62ecfdd419114892787a

A temporary moratorium on the issuance of NuBits will be observed by
shareholders and custodians. This means shareholders should not pass any
custodial grants for NuBits. Only custodial grants of NuShares will be
acceptable. Existing NuBits in tier 4 held by FLOT, FSRT and Jordan Lee
must be held at their current address or burned. Compensation can still
be given in NuBits to contractors, but only if NuShares are sold for
NuBits purchased on the open market.

This moratorium on the issuance of NuBits will lift when the NuBit price is $1.00 again.

[backpacker]

i was thinking the same thing, but more radical approach of pegging to 1 cent with 100% reserve.

[nmei]

Phoenix - I like your name. Chosen for a purpose…
This goes a long with the ideas posted by others.

[PoP]

Why choose a low peg? We aren’t playing the market to our advantage by cutting the value short. Why don’t we wait and see where nbt stabilizes and work to support it there instead of cut its value by more than half to rush a pegged position immediately.

[Confucius]

I hope this isn’t suggesting to peg the sell side to $.10.

[nmei]

To me that’s the way it reads…
There’s a lot more specifics needed though.
Allowed spread?

AND Nu doesn’t have the funds to support $0.1
Right now that’s ~110 BTC

[Phoenix]

wait and see where nbt stabilizes

It is our job to regulate the value of NuBits. We must have a peg to provide liquidity.

[Confucius]

We must have a peg to provide liquidity.

Why?

[PoP]

That ship has sailed. Don’t force it now at the expense of the project. Let it reorient then re-establish regulation. I agree with the 100% backing part.

[Phoenix]

AND Nu doesn’t have the funds to support $0.1

Let’s explore that claim. How many reserves does Nu have right now?

Whatever the answer, more can be had by selling NSR. I expect a gap of several tens of thousands to meet full reserve, but we can meet full reserve over a period of weeks through NSR sales. The utility of parking would also be fully restored, to the degree there is confidence in the new peg level.

[Phoenix]

Liquidity is nearly always provided by NuBot or PyBot. These require a target price. NuLagoon Tube, all of our pools and individuals such as muchogusto all require a price target as a basis for their offsets.

@woolly_sammoth @desrever can NuBot and PyBot support pegging at $0.10 without modification? If a modification is required, can you make a special build supporting a configurable peg target?

[Confucius]

Right now, Liquidity is provided by the free market at Poloniex. Fighting the market, in such a turbulent time in BTC, I think, should be done dynamically and quietly. Otherwise It will be gamed by smarter people than us.

Why can’t we we resolve to use/make a bot to tighten the existing spread, just a little, so that Nu makes money on the spread?

[creon]

New account? How refreshing … you still need to answer those questions though …

I can tell you for both NuBot and PyBot that modifications are required, but of course small (just divide the price feed output by 10). However, you still suffer from the fatal thinking that someone will buy NSR just because you promise to buy more in future. You just want to restart the ponzi from 10 cents, but still without revenue.

[PoP]

We need a market for nbt. It can’t just be a liquidity provider. I made another thread suggesting a casino/lottery but the more ideas we have to use nbt as a burn-able fuel or a required currency or intermediary for a service the more we make revenue and can support the ecosystem other than ponziing it

[Phoenix]

I can tell you for both NuBot and PyBot that modifications are required

@creon, would you be willing to create a build of NuBot and/or PyBot that features a configurable setting for the peg level?

[nmei]

No more houses of cards and vision statements…

We need blueprints.
We need plans with risk vs rewards.
We need P&L projections for any venture undertook.

We didn’t have it before - blindly striking out. And that’s what got us here.
This is a “business.” Let’s start acting like it.

[PoP]

I can definitely envision a blue printed and highly successful strategy

[creon]

@creon, would you be willing to create a build of NuBot and/or PyBot that features a configurable setting for the peg level?

I’m not stepping in here in any way, just watching and calling ppl out for their bs. Again, its a minor thing to achieve what you want, in the Nubot just get another float from the option parser and use it here to divide the prices:

https://bitbucket.org/JordanLeePeershares/nubottrading/src/a23c13bfe5c7ba681d459898256aea23eae81e28/src/main/java/com/nubits/nubot/trading/TradeUtils.java?at=master&fileviewer=file-view-default#TradeUtils.java-157

Likewise, just hack another param into the pybot and divide the price here:

https://github.com/Nagalim/alp-collection/blob/master/python/utils.py#L231

But that ain’t solve your problems.

[Chronos]

@Phoenix who are you?

[Phoenix]

@Phoenix who are you?

From Dictionary.com:

a mythical bird of great beauty fabled to live 500 or 600 years in the Arabian wilderness, to burn itself on a funeral pyre, and to rise from its ashes in the freshness of youth and live through another cycle of years: often an emblem of immortality or of reborn idealism or hope.