It is now a historical fact that Nu has reduced its available money supply from 820,000 at its peak earlier this year to 173,405. While this isn’t purchasing every NuBit back, it is very close. We successfully removed 79% of the money supply from circulation while maintaining the peg. It is true our record is blemished by the Augeas default, when rebellious decentralized liquidity providers lawlessly and cruelly shut down almost all liquidity operations for about 1 month. What followed clearly demonstrated the Augeas claim that Nu was bankrupt and out of funds to be completely false. In fact, it appears Nu has had sufficient funds to buy back all NuBits at all times. May and June were no exception. The funds available for currency buy back were so ample that even after Augeas destroyed about 85% of them (in the form of an 85% drop in the NSR price), there were still ample reserves remaining to buy back about 500,000 US-NBT.
This is an amazing validation of the liquidity model proposed by @JordanLee and embraced by shareholders in 2014. It works, with ample spare capacity for suboptimal use of the model.
It only fails when it isn’t used at all. What Augeas did in May and June was fundamentally and completely incompatible with the liquidity model mandated by shareholders. Most importantly, exactly zero NSR was sold before the peg was abandoned. In the following month, only 2.5 million NSR was sold, yielding only a few thousand dollars worth of peg support in one month’s time. Augeas had the benefit of 500 satoshi NSR. When I began supporting US-NBT for shareholders, the NSR price was around 70 satoshis. Yet under my leadership, we purchased somewhere around an average of 130,000 US-NBT each month for more than four months. Therefore, I was able to provide about 43 times as much peg support with only 14% as many resources. This means my support of the peg was about 310 times as effective and efficient as what Augeas did at the end of May and throughout June. That is the measure of the greatness of the monetary malpractice committed by the liquidity providers at the time. The Jordan Lee model was only utilized to at most 0.3% of the potential I have proven it has. But even my utilization of the model was imperfect and suboptimal.
Rejoice! Nu has proven a successful model for decentralized stable currency that has worked for nearly 2 years. The only limitation of the model is that, well, it does need to be employed.
NSR liquidity, more than anything, is the strength of the peg. I have been very skillful in cultivating liquidity. Prior to my time as Chief of Liquidity Operations, daily NSR trading volumes were approximately 0.1% of all NSR. Today, they average around 3% of all NSR, a 30 fold increase. Hopefully, we can maintain this as the NSR price rises.
The future of the peg is looking bright.