I think you make a good point, but I basically think if the BTM wants to return value to the system they can simply buy nbt and burn it.
I think having this flexibility may lead to a NSR price that is not so sensitive to the health of the NuBits peg. Another option would be purchasing and burning NuBits with the profits, but if there is a regular dividend coming in, shareholders may be more comfortable taking the risk holding their shares as opposed to dumping them and placing a low NSR bid via motion, which I feel is self detrimental to Nu in the larger scope.
EDIT: Had my thoughts backwards in text.
Iâm confused by your wording. Why would dividends make shareholders dump? I understand the desire to make Nu seem profitable, Iâm just wary about it only being that: an illusion. If parkrates are nonzero then shareholders believe the peg is not 100% secure and I find it difficult to justify taking profits. The whole thing is fungible from my perspective and distributions should only happen when we clearly have profit in addition to whatâs required to maintain the peg. That situation most likely is not the case if shareholders are still voting for nonzero parkrates.
We agree here, but at times you have mentioned buying and I assume burning NuShares âif the price is too lowâ. I see dividends and NuShare burning as two different ways to achieve the same thing. Namely, returning value to shareholders when there is something to return.
Would you agree that we should never be burning NuShares under the same circumstances as we should never be distributing dividends?
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No, I donât agree because I donât believe burning should be used to realize profits but instead to keep nsr price fungible with nbt peg support.
When nsr is low and nbt buy support is high, burn. When both are low, increase park rates.
I see where youâre coming from: if nbt buy support is high park rates should be zero. However, sometimes the right move is a little of column A and a little of column B (buy nsr, burn it for nbt, park it). Park rates and distributions, on the other hand, are distinct opposites in my mind.
Here we are back where you need to explain how burning NSR for NBT makes us buy side liquidity to buy NuBits back from our customers. I argue it does the opposite in that it takes away buy support.
While not entirely relevant, I would like to point out that burns are not necessarily accompanied by creation. For instance, the BTM would burn nbt without getting anything in return.
For nsr/nbt burns, a price point is chosen. The concept here is not necessarily to directly benefit the peg, but instead to keep peg liquidity and nsr price directly linked. If NSR is kept low while NBT support is high, people will think the system is broken and not profitable. Without burning, our only option is distributions. However distributions take money out of the system directly and if it does not instill the confidence in NSR profitability as desired then we will be up the creek next time the peg is in trouble.
Letting custodians decide when burning is profitable and offering relevant burn rates with a generous spread will make sure that that situation never arises. By the way, that generous spread counts directly against any inflation in the system.
Burning nsr for nbt is done when the custodian thinks they can sell the nbt for more than $1 equivalent (via nbt/btc or whatever) and it is in precisely this situation where we care the least about creating more nbt.
My understanding is that there is no correlation between nubit and nushare.
Both instruments are independent from each other.
It makes the design very simple and full of possibilities.
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Seeking a verifiable mathematical basis for nbt and nsr.
The total value of all nbt in dollars. The total value of nsr. The financial consequences of burn. The actual effect of interest. The amount of the applied Nubits. All this currently as a live calculation.
You could present it with a bar chart. A live bar chart. No matter how. In any case, the functionality of the system must be represented.
Weâre talking about how gardeners who talk about cloud formations and when the best time is to sow.
I need visible numbers.
The burn motion makes a correlation, in addition to public perspective and shareholder/custodian liquidity. The correlation between nsr price and nbt peg support is very real. Iâm asking that we realize this and use it to our advantage.
Sorry for being unclear. I feel you are trying to create an automatic mechanism to create or destroy nbt/nsr depending on the price of nsr/nbt a la bitshares but also feel that it is not something that is in the DNA of Nu. Therefore it would be very difficult to pass a potential motion that tries to introduce such a mechanism.
Please correct me if my interpretation is wrong.
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Semiautomatic, driven by custodians. I am saying the burn motion already put this mechanism in place, but it did it clumsily and will guarantee that any burn comes at the cost of Nu profitability. Iâm saying we need to revisit the burn motion. If we think itâs not in the Nu DNA, fine, but then we need to revoke the burn motion. If we decide it is in the Nu DNA, I just want recognition that the burn motion is not in its final form in the same way that having ktm run all liquidity operations was not the final form of liquidity operations; a more decentralized and continuous approach where risk and profit is shared across many custodians is necessary.
I believe it is in the Nu DNA because liquidity providers and shareholders are often the same people, so NSR price and NBT support are already inextricably linked. Not to mention they have the same branding and developers.
I believe that statement is wrong on an economic level, though that can be debated. With the burn motion, however, codependency of the two Nu units is a fact.
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I share the perspective that what has been passed by motion is not the final form. There was a great deal of discussion about the best way to make this work some months ago. Every other solution that was proposed had significant drawbacks. The very simple solution of just permitting NSR auctions is easy to implement, low risk, very flexible, though not as automated as most other solutions. After we use it a bit I think we will understand the networkâs needs better and can add layers of functionality on top of the flexible base we have constructed.
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Thank you for the response.
Would you vote for a motion that enabled anyone in a NuPool to burn nbt to nsr at a rate 10x the coinmarketcap price with volume up to the amount of compensation they have received for liquidity services?
The burning motion surely created a final link between NSR and NBT, its not that NBT is backed by NSR are shareholders are able to use NSR capital to support the NBT peg.
I still donât think that motions are the right tool for that though. Why donât we let people apply for parking using motions? I see no reason why parking was designed in this intrinsic way while burning was not.
So I think burning can be implemented on the blockchain just as parking. Shareholders vote for a certain amount of NSR or NBT that may be burned in exchange for a specific amount of NBT or NSR respectively. Anyone, Nu related or not and registered on this forum or not, can take this offer at any time in the client and the whole operation doesnât even require any trust.
To make me feel super happy I would also change the compensation for parking to NSR 
but this is another topic.
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a million likes here.
You mean NBT burned for NSR, right?
Right ⌠I mean we allow for both, donât we?
EDIT: Clarified that, thanks.
Cause currently there is the pathway of the Malicious Shareholder:
buy a bunch of NSR, manipulate park and burn rates, burn for NBT, park NBT. After shit hits the fan or doesnât, whatever, you sell your NBT and crush Nu walking away with the profits.
I wouldnât vote for inflating NuBits to buy NuShares under any circumstances. Any buy back would need to originate from excess BTC or USD a custodian generates.