Wall Observer - NuShares price movement tracking & discussion

[mhps]

NSR price under $0.001852, how is this even possible?

it seems as if the current dividend distribution method is not going to be used after nushares burning

There were some discussions on this

[Nagalim]

My vision of distributions is that they are used when NSR price is high and the NBT buy wall is strong. Basically, we create NSR and sell it for ppc which we distribute. Conversely, when NSR price is low and the NBT buy wall is weak, we institute high park rates.
These mechanisms allow Nu to speculate on its own market. Burning simply allows this process to be more fluid, it does not replace these mechanisms. In my opinion (which I’m sure some are tired of hearing) is that burning should be decentralized and done daily while park rates and distributions take care of things on the month to month scale.

On a side note, y’all know this dip was because skullandheadphones sold 3.5m shares right?

[GreatScott]

NSR price under $0.001852, how is this even possible?

Basically, we create NSR and sell it for ppc which we distribute.

So we would inflate our shares to distribute dividends. This is just getting weird, no offense intended. I keep thinking this is just moving money from one pocket to another and hoping the market doesn’t notice, whenever you bring the NuShare market into this discussion of your vision. Sometimes even pulling the money out of thin air and putting it into our pocket.

[Nagalim]

Yes, we should inflate shares to distribute dividends, that is why it is done when the NSR price is high. Some of the people that sell their PPC for NSR will burn the NSR for NBT and drop it on the peg and some will hold, it’s best to let the market find the new equilibrium. @Sentinelrv proposes we inflate the NBT supply to drop on the peg for the ppc, but what do you think will happen when the peg is in trouble again while NSR price is high? We burn the NBT for NSR and NSR supply gets inflated anyway. I’m just cutting out the middleman so Nu is the one that profits, not traders.
A distribution imposes inflation on the network no matter how you look at it. This is done intentionally during a time when we have inflation to spare.

[GreatScott]

NSR price under $0.001852, how is this even possible?

@Sentinelrv proposes we inflate the NBT supply to drop on the peg for the ppc, but what do you think will happen when the peg is in trouble again while NSR price is high?

I think you are misunderstanding the relationship PPC has with Nu. There is no peg. It could fall to $0.01 and it has no effect on any of the currencies on our blockchain.

[Nagalim]

The NBT/USD peg, so you can buy the ppc with USD cause there’s no PPC/NBT market.
The point is, Sentinelrv’s concept has NBT inflation. How is that any better than my concept of NSR inflation?

[GreatScott]

I am so lost right now. PPC isn’t bought for dividends with NBT so there is no NBT inflation at all resulting from it. I don’t think @Sentinelrv was proposing that there was, though.

[Nagalim]

so where does the money for ppc distributions come from?

[GreatScott]

NSR price under $0.001852, how is this even possible?

so where does the money for ppc distributions come from?

Profits, when they exist. Either BTC or USD profit from custodial operations that net one.

Though, at this time shareholders have expressed that they would prefer to instruct a custodian to buy and burn NuShares on the open market.

[Nagalim]

I see distributions as being on the opposite end of the tool spectrum as park rates. I see burning as a way to deal with daily business operations for custodians. I don’t really see Nu making additional money, because Nu’s business is adoption, not earning USD. We are making a way to translate fiat into crypto, so we can channel all profit and all inflation into one market: the NSR market. That must be where we take our distributions from and call it a profit of the system; we must be exceedingly smart about how we do it and only do it when we can afford the inflation.

I know I’m being loud about this and I plan on being more quiet in the future, as I believe people have heard me out at this point. Thank you, @GreatScott in particular for taking time to have this conversation.

[GreatScott]

NSR price under $0.001852, how is this even possible?

I don’t really see Nu making additional money

I must say I differ here. We are going to make a profit if this is going to be considered a success, we just haven’t made the right relationships or realized enough adoption to achieve this yet.

It will be much harder to make these relationships if we inflate the NSR market without abandon, I feel. NSR is our bargaining chip for such partners, just like any other business.

Thanks for being loud like me! I tried the quiet route after my dividend motion didn’t net any votes, but then you came along. It’s good to bounce these things off each other. Your vision, while I still disagree with a lot of points, has caused me to appreciate what we have today a bit more. I still feel we need to be really conservative with printing NuShares, though.

[Nagalim]

See, cause with a statement like that I feel like we’re on exactly the same page.

NSR price under $0.001852, how is this even possible?

It will be much harder to make these relationships if we inflate the NSR market without abandon, I feel. NSR is our bargaining chip for such partners, just like any other business.

I deeply agree, that’s why distributions should be done with extreme caution.

I’m arguing for a heavier link between the NSR price and Nu’s success, so that we can truly tout a high price as a true bargaining chip. I actually consider it to be a transparency issue, believe it or not.

NSR price under $0.001852, how is this even possible?

I still feel we need to be really conservative with printing NuShares, though

Yes, I very much agree, but what I want the network to realize is that printing NBT when the NSR/NBT ratio is low is equivalent to printing a lot of NSR. The only thing it would take to realize this is a burn motion at the low NSR/NBT price point. If we are banking on shareholders not passing such a motion, then we are hedging the market. Eventually there will be a panic break and a black swan situation and low NSR/NBT burns to reduce NBT inflation will be passed.

[GreatScott]

NSR price under $0.001852, how is this even possible?

I’m arguing for a heavier link between the NSR price and Nu’s success, so that we can truly tout a high price as a true bargaining chip.

I feel the price of the shares should be solely set by the free market without much interference beyond inflation for clearly beneficial partnerships or emergency funding to maintain the NuBits peg. I am talking break the glass to use the fire extinguisher emergencies. This is where we collide.

[Nagalim]

But then you’ll always have the worst nsr/nbt pricepoint for auctions or however burns happen in your model.

[GreatScott]

NSR price under $0.001852, how is this even possible?

But then you’ll always have the worst nsr/nbt pricepoint for auctions or however burns happen in your model.

Individual and public bids seem to be the way these will take place going forward. We cannot expect to have a good price when we are desperately selling shares, just as someone just recently found out on their own.

[Nagalim]

I am offering a fix: allow custodians to burn to hedge the nsr/nbt market using a decentralized process like NuPool. The capstone would be risk based compensation for market orders that counter nsr price spikes and black swan events, but that’s a complicated model and nu isn’t ready for it yet.
The alternative is crucifying nu on the open market any time we want to counter nbt inflation.

By the way, do you agree we should only distribute if park rates are zero?

[GreatScott]

NSR price under $0.001852, how is this even possible?

The alternative is crucifying nu on the open market any time we want to counter nbt inflation.

By the way, do you agree we should only distribute if park rates are zero?

I do not know that I would call it crucifying Nu, but I have no interest in Nu using resources to support the price. It is a distraction from our goal of defending the NuBits peg.

Distribute NSR if park rates are zero to raise buy side liquidity? If park rates are zero this should assume that buy side liquidity is high and there should be no reason to distribute NSR.

[Nagalim]

When I say distribution I mean ppc distribution. I’m just asking if we can agree at the very least that there should never ever be a ppc distribution while parkrates are nonzero.

[JordanLee]

NSR price under $0.001852, how is this even possible?

I’m just asking if we can agree at the very least that there should never ever be a ppc distribution while parkrates are nonzero.

That is my opinion.

[GreatScott]

I’d be hesitant to use the word never, but absolutely I agree with the point. Every custodian has the freedom to make their own terms. There may be a model that comes in the future where profit is inevitable and not dependent on the health of the peg.

Imagine a BTM operator that integrates NuBits into BTMs and distributes a portion of the profit off of BTC fees to shareholders as dividends, while keeping the NBT purchases at 0% fees. Perhaps the BTM owner got a loan or NSR agreement that leads to the incentive to return so much value to shareholders.