Grafana has said Nu reserves are at ~200k usd for a day now. There hasn’t been a buy wall on bittrex in 24 hours. This indicates that Nu has gone below 20% reserve. Yet, the share dilution mechanism has drastically reduced sell offs, to the point where there has only been $5k sold in the last week. This looks extremely similar to what happened in the summer of 2016. Can an officer please point to an unannounced bitcoin address that contains several million usd of bitcoin, or else describe why Nu has not entered a critical sell off phase?
If I remember correctly, there was far more buy support for NSR in summer 2016 (until NBT was devalued unnecessarily), so selling more would have made a lot of sense.
A critical sell off phase now would likely see NSR run towards 1 sat. It’d be interesting what buy support emerges if it gets much lower than 10-11 sats, but I’m not sure it’d be the best idea when buy orders are so low.
I think it’s worth giving boosting short term park rates a go before exhausting the market for NSR.
It’s looking highly challenging, but it’d be great if Nu can get through this while maintaining the NBT peg.
For the future, I think getting an ongoing demand for NBT will be important to reduce the scale of these sell offs that can threaten the model that operates on reserves of 40% or so.
So the 20% threshold is no longer policy?
Also, the nsr price in usd (or USNBT, if you want to get technical) today is very similar to what it was in summer 2016. Within a factor of 2. It’s hard to compare buy orders because we can’t see the hostorical reference, but I suspect it was also similar when valued in USD. There was never much more than $20k on the buy side of the order books.
I can’t help but see the parallels. You say “this time it’s different”, but it’s really not. I wonder if we’ll see another pseudonym rise up, blame jooize and pheonix as bad actors, and take control of liquidity operations for round three.
Perhaps - I can’t remember, though I do remember it dropped greatly when the peg was lost… so I’m assuming it fell from a level with more than $20k in the order books back then.
I just said I remembered NSR having more opportunity for selling to generate reserves than there is now, which could be wrong as it’s just from memory.
I also said it looks highly challenging. It’s a different situation, but I didn’t say it looks any easier to solve. We’ll just have to see how it plays out.
I remember watching $2k crush the market the day it happened, causing something like a 50% price drop. So forgive me but I don’t think you are doing justice to just how illiquid NSR was at the time.
One way you can see this is to look at daily volume. It was ~$5-10k at that time.
Our system is currently reliant on the Tier 6 backing mechanism where NuShares are sold with the investor’s incentive of a high reward when NuBit demand increases and we begin to buy back NuShares. We’ve successfully backed NuBits via Tier 6 before. Prospects of the network are increasing with the new management, developments, and marketing. There is massive untapped demand for NuBits judging by the success at Bittrex. We’ve just been terrible at distributing and announcing NuBits.
NuShare sales have decreased to avoid unnecessarily depressing an immature market. Liquidity Operations is committed to supporting every circulating NuBit and deemed it more viable to lighten the pressure on the NSR while still continuing regular sales. Buy orders have since risen from 7 satoshi to 11 satoshi.
Tendency for NSR buy orders has been to increase over time, and there has never been immediate support for the entire circulating supply on the order books, yet the orders kept coming in from people investing over time. Volatility is high now. I expect it to settle with maturation.
Once we’re selling NuBits in multiple markets the Tier 5 Park Rates mechanism can have more effect. After the first manual sales of CNNBT, all of them were parked, suggesting a direct effect of park rates on NuBit demand. Along with when the NuShare is understood as a volatile money maker for those who trade it in the swings of NuBit demand, the entire system will be more robust.
NuBits design is interesting because it doesn’t fundamentally rely on conventional reserves. However, until we reach the point of market saturation when that’s fully viable, asset reserves will play a significant part as buffer for NuShare liquidity. Hedging mechanisms are of value for our liquidity, and it is worth exploring our options. Limited by time, presentations of possibilities and draft implementations can impact our direction.
Those convinced that NuBit demand will be higher in the future buy NuShares today. Bootstrapping a stable currency system is bound to take time and adjustments. It’s definitely worthwhile, and a worldwide stable entity is built in incremental steps. One exciting development is the press coverage expertise hired from March 6. Progress is happening.
So is 20% still a threshold or not?
It is, but we’re working out the circumstances where applying it isn’t the best approach.
Thanks for the response. On the upside, the crash in btc price just now repopulated the buy side. It is interesting that these million dollar events are dominating the volume, such that the reserve swings by like 10% of the nbt supply within just a few minutes.