When I buy 1 Nubit now, who gets the Dollar?

[brio]

You buy one NBT for 1$. Where goes this money? One small part goes to the exchange, one big part has to be kept for people selling NBT and one part goes to the shareholders.

The shareholders will get the dividend paid in PPC. The divident will be bought with the money from selling NBT. Buy a huuuge amount of NBT --> a lot of PPC will be bought to pay the shareholders --> PPC rises.
You can sell your NBT for the same price.

I hope I’m right, :-p If not, please correct me.

[Sabreiib]

After some thinking, my opinion is that the dividend should only come from Nu’s pure profit, ie transaction fee.

So , the Nu system is sustainable and NOT ponzi.

[Ben]

After some thinking, my opinion is that the dividend should only come from Nu’s pure profit, ie transaction fee.

Ok, let’s say that hypothetically all of the shareholders agree with this position. How do we deal with the more difficult challenge: keeping the funds used to back the purchases in a location that is stable in value, secured against threat, and accessibly only by the protocol rather than by an individual or individuals?

[Sabreiib]

Ok, let’s say that hypothetically all of the shareholders agree with this position. How do we deal with the more difficult challenge: keeping the funds used to back the purchases in a location that is stable in value, secured against threat, and accessibly only by the protocol rather than by an individual or individuals.

Depending on how the grant was structured, either that dollar will be exchanged for $1 worth of peercoin, or, more likely, it will be “recycled” back to the buy-side of the exchange at a price of $1 minus the exchange fee.
In the second case, there probably a dividend percentage that is taken at the time of sale (say, 5% or 10%). That portion is diverted to be used to buy peercoin and the other 95% or 90% are returned to be used to support the lower-bounds of the NBT price.

So the 90 or 95% USD is still in custodian’s account on exchange to support liquidity.

While I suggets 100% USD from NBT selling is in custodian’s account on exchange .

I think we shouldn’t preset the divident ,ie10% of selling income or 20% etc.

How about 40% of selling income? So what’s the calculation method of divident? Just because nushareholder’s election propaganda?

The divident should come from our business activity profit, how can we preset it before we finishing that business action?

I guess many Nushareholders will sell their PPC divident for FIAT and money will never return into Nu system again.

My two suggestion

1. 100% reseve, divident come from pure profit.(transaction fee etc)
2. In future, Nushares go to public market. Custodians must pledge their 2X 3X value NSR in order to issure NBT. If a custodian runs away, or stolen, the system can keep those NSR to make up a loss.

The free market knows and compares NSR/NBT market capitalization, if NSR fluctuates lower than NBT, they will sell NBT for FIAT to avoid risk. In this way, Nu system is always affordable for its product:NBT. And that’s the source of our reputation.

We can only be helped by ourselves, not any others. We are central bank and business bank simultaneously, why people belive NBT=1USD is our wealth: NSR in shareholders and FIAT in custodians’ hands. We have no guns, tanks, missiles, A-bomb to force people accept a currency which is badly backed such as FIAT.

[brio]

The difficulty I see is the $ needed to pay out NBT sellers. Where comes this money from? From the $ I paid before there will be only ~0.9 left because of fees and divident payouts.
That’s clearly a ponzi scheme.

you have to tell the people that they buy NBT for 1$ + 0.1$ fee. That would be ok.

Another problem: PPC will get obsolete and the worth decreasing over time. Bit & -altcoins have worth because the people think one day they can pay with them. But PPC will be substituted by NBT so all the people investing now in PPC will sell, value decreasing. PPC will only be a conversion path between other currencies. Value will probably get as low as Ripple or Stellar.

[Ben]

you have to tell the people that they buy NBT for 1$ + 0.1$ fee. That would be ok.

That is how the NuBot is configured. Sell-side pricing of NBT ($1.002) is set nominally above the intended pegged price of $1.00, to account for exchange commissions. The buy-back price of NBT ($0.998) set by the bot is the exchange fee subtraced from $1.00, to somewhat mitigate a situation where the sell and buy walls are slowly eaten by fees.

What would be very good for the Nu ecosystem would be to find or develop an exchange that would offer extremely low commission fees on NBT trades if they occurred within a narrow range (say, $0.9985 to $1.0015). That way, the walls on either side could be positioned just to either side of $1.00.

The exchange could be customized to an even larger degree to allow people to sell for the same price that the walls do and still get their orders picked up before the walls’ orders are. By doing this, anyone could price themselves at the same price as the major wall, but they would not have to wait for the sell wall to be consumed before their orders would be accepted to satisfy a bid.

[masterOfDisaster]

Why not introducing a wider spread between buy and sell? That way the custodians could “earn” money and pay e.g. dividends or park premiums with it.
Nothing big, 0.98 / 1.02 maybe.
The space in between would sometimes be filled by other traders so that in fact the effective buy and sell prices would be close to 1 USD.

[Ben]

Why not introducing a wider spread between buy and sell?

It’s certainly possible to do that. I would like to see a custodial proposal generated that take this into account and articulates the type of ROI that could be attained.

[Sabreiib]

24 Hours volume on Bter 172BTC, while only 22BTC of buy wall which means the custodian only sell out 22BTC value NBT.

Most people buy NBT and sell it later. The transaction volume vs sell out =172/22=7.8.

If we charge 0.5% transaction fee, we got profit of 0.5%X7.8=4%.

Not bad.

[Cybnate]

I think your calculation is too optimistic. Not all trades would attract a transaction fee. Only the ones on the buy/sell wall.

Edit: 0.5% also sounds high.
Edit2: Or is the 22BTC SELL/buy wall only?

[Ben]

24 Hours volume on Bter 172BTC, while only 22BTC of buy wall which means the custodian only sell out 22BTC value NBT.

Currently, 100% of the value of the NBT sold on the exchange are going back into the buy wall. @KTm’s report from the other day indicates that the 10% withholding from the sales has not yet started (though it is being recorded to properly match with the “periods” she describes in her proposal).

“Total trading volume” on the exchange is bi-directional. The wall is 100% funded if everyone who purchased NBT decided to sell, the buy wall would be completely consumed. There may be a tiny fraction not covered due to arbitrage position losses, or there may be a fraction left over because of gains due to exchange rate differences. But in any case, it is close.

[Sabreiib]

Bter, buy wall 8778NBT@ 0.00239336 BTC and sell wall 389397NBT@ 0.00242710, price is 98.6 vs 100.
Who takes away 1.4%? Bter and KTM?

Of course, there are quite some transaction between these two price.

8778+389397=398175<400000, Has KTm lose 1825 NBT in 3 days?

Simple question: if BTC price suddenly drops to half, what’s the change of 22BTC buy wall? Still 22BTC or become 44BTC?

If still 22BTC, we introduce BTC risk, we should cancel all the BTC/NBT pair.

[Chronos]

Simple question: if BTC price suddenly drops to half, what’s the change of 22BTC buy wall? Still 22BTC or become 44BTC?

If still 22BTC, we introduce BTC risk, we should cancel all the BTC/NBT pair.

It remains 22 BTC.

[lg15x]

Maybe, some exchange merchant could help for Nubits.

[Sabreiib]

it remains 22btc. very bad.

That means attackers could sell a lot of NBT when BTC price drops because they can transfer more BTC whth their NBT, and attackers will buy lots of NBT when BTC price go up with less BTC.

That is counterpart risk!

Stop this! Negotiate with exchange for just “display” buy wall BTC while actually we holding USD. Otherwise, cancel all NBT/USD pairs, I suggest.

[Cybnate]

When price of BTC goes down against NBT, BTC goes down against USD.

When BTC is US$400 NBT/BTC rate is 0.0025.
When BTC goes down to US$350 NBT/BTC rate will be ~0.0028
In both cases NBT/USD rate stays the same.

In your example halving the price of BTC would result in doubling the rate of BTC/NBT.
Maybe @Chronos misunderstood your question?

Edit, thanks Ben you triggered me. This is about a buyback fund. The issue is that you can’t hold a buyback fund in BTC or NBT. It has to be USD or a very stable commodity against USD outside cryptoworld. Maintaining such fund would create challenges in managing and regarding decentralisation. Keeping the fund on the exchange in US$ would create an exchange default or hacking risk.

[Ben]

Where does the USD held in reserve come from in your scenario?

[Sabreiib]

LPC should hold USD with real name in exchange account to avoid BTC volatility. I completely agree with that.

If there are only several big LPC in future, we need to resolve two issues.

1. let people trust several of you even if LPC retrieve USD from exchange to bank accounts.

2. pray for government will NOT control those real name LPC and ruin the whole system.

Either is difficult.

[Cybnate]

Another option is to introduce another NuBits coin pegged to a relative stable currency like Euro or Yuan. The buyback funds can then be held in multiple wallets with multi-sig and would be relatively safe. Only risk remaining is changing EUR/USD or CNY/USD rates.

Disadvantage is that you wouldn’t be able to make the money work, so I think it would be hard to make a viable business model attractive to the stakeholders. Only option I can think of is reducing the buyback fund to 80% or maybe even 50% instead of 100%.

[lovely89]

I completely agree. See my post-

Leveraging and capital for confidence and stability