When can we expect the next dividends?
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According to this recently passed motion…
…the proceeds from selling NuBits will no longer be used to buy Peercoin for dividend distribution. Instead, it will be used to buy back and burn NuShares. This doesn’t mean dividends will stop however. Shareholders will need to devise ways of creating revenue other than just selling newly created NuBits. This could possibly include loan and venture capital custodians, or something else altogether. I’m sure there are plenty of ways to make revenue for the network. We just need to explore them.
Currently though, much of our focus is on finding ways to decentralize liquidity operations so that we can remove counterparty risk. Once this has been properly solved, I’m sure more attention will be paid to figuring out ways to make profit with the network we’ve created. So no dividends for now. That will come later on once we solve our current liquidity problems and then figure out new ways to make profit for shareholders.
EDIT: Unless the previous dividend arrangements remain intact until current LPCs officially shut down operations. I’m not sure on this.
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I’d wait for a message from @KTm to confirm this, but considering the impact of the exchange hacks, I find it hard to believe that the network (as defined by the operations that she was running) have any profits to distribute.
Presumably, if that position were to change and there was a positive shift in custodial funds before her operations formally ended, I could see dividends being issued – I wouldn’t hold my breath though (for the initial custodians).
@Sentinelrv has the right idea – the network is maturing and it’s up to us all to work on identifying opportunities for the network to profit from the services that can be built on top of Nu.
Correct me if I am wrong, but this is just the opinion of some shareholders. (I was wrong. I just read the motion, I was going off the draft and my memory.) Sure we do not currently have a dividend producing custodian right now, but we are not abandoning the dividend feature. We have simply added another feature.
How exactly a custodian is going to buy back NSR on the open market while keeping shareholders’ interests as top priority is a mystery to me. People should not get all excited that we can create NSR when we haven’t proved that we can effectively take NSR out of circulation. NSR isn’t as easy to remove from circulation because it is not pegged.
I have heard it said that “This will be good for volatility in NSR”. Can you imagine Apple saying that their stock is good because it will be really volatile? How are we going to assure the shareholder who isn’t an active crypto currency trader that they will get the same value returned to them as the shareholders that are playing the orderbook at the right time or the custodian who may have knowledge of the best time to sell?
In conclusion, let us not throw out the dividend feature just yet.
I actually prefer share buybacks to dividends. When a custodian uses their profits to purchase and then burn NSR, the price of NSR rises. With the current high price elasticity of NSR, the potential exists to substantially increase the displayed market capitalization. We have seen from our webpage analytics that (by far) the largest driver of new users comes from Coinmarketcap.com on days we have double-digit percentage growth.
A user can still sell their surplus NSR value to simulate a dividend. The difference is that share buybacks provide a clear public signal to all cryptocurrency users that the Nu network has value, whereas dividends only communicate that message to direct shareholders.
The Nu network has already proven that NSR can indeed be taken out of circulation. A little over 2.7 million NSR has already been burned by KTm.
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KTm and jmiller acquired the NSR they purchased or received under circumstances that I do not feel are going to be the norm. For example, how would NuNet burn 100 million NSR?
The same way KTm just did, with the burning mechanism.
If shareholders decide that share buybacks are preferable, they will be dominated in USD (or NBT), not NSR.
Dividends are currently announced in USD terms. Someone like KTm can announce that 50,000 USD worth of dividends need to be distributed. She would then purchase as many PPC as possible with those funds, and then distribute them.
With share buybacks, the same approach would be taken. KTm could announce that 50,000 USD worth of share buybacks will occur. She would then purchase as many NSR as could be purchased with her funds, and then burn them.
This is why having a decentralized exchange built into NuNet would be amazing. During times where demand for nubits is high, fees collected from the exchange could be saved and trustlessly divided amongst shareholders with a simple vote, used to automatically buy and burn nushares, or put into the wall. When Nu is in low demand the fees would be burned instead. Determining when to save vs burn could possibly be automated by the network based on sell/buy walls on the exchange as well.
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While calling CCEDK a shareholder desired share buyback is a stretch, I think my concern is the bigger picture. It will take an order of magnitude more revenue to remove NSR from circulation than we receive when we distribute it for under market value. Though, markets can move anywhere. Let us say NSR dropped to a fraction of it’s low price today, then it might be feasible to remove 100 million NSR for the amount of revenue we recently got in the auction, but if we had that kind of revenue for profits, the NSR price would probably not be low.
Every shareholder gets the same value from dividends. It is fair and we do not need to trust that a small group isn’t taking advantage of the situation. There also needs to be a lot more transparency than the last time a custodian bought NSR on the open market. We still do not know what price it was bought at and questions have been discouraged.
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I’m not sure I understand your logic, but I’m trying to. Remember that NSR share buybacks would be denominated in USD, not NSR. In my previous example 50,000 USD might buy 1,000,000 NSR or it might buy 100,000,000 NSR. It all depends on the market depth and price elasticity. With a constant (or increasing) demand, the price of NSR should rise when the supply is reduced.
Share buybacks are intended to boost the market price of NuShares, not somehow maintain a preferred equilibrium of NSR supply as is the case with NuBits. As long as the USD value of NSR removed from circulation matches the planned dividend, the net effect is equal.
They get the same USD book value of dividends, not necessarily final value. The final value depends on when a shareholder chooses to convert their PPC dividend to USD. Very rarely would 50,000 USD worth of PPC be available at one spot price in my previous example.
With share buybacks, the same principle applies; every shareholder receives the same bump in book value of their NuShares. As I mentioned before, the primary difference and benefit is that this bump is publicly visible on CMC, as opposed to only communicated to shareholders who received the dividend.
I don’t think questions are ever discouraged on this forum. We try not to be an echo chamber. If you have concerns about the manner in which @jmiller hedged against shareholder loss, you are always welcome to raise the concern in a post. If you believe he acted unethically then you have every right to question it. My own belief is that Jamie operated as best he could in a time of great uncertainty - when shareholder funds were bleeding rapidly from BTC depreciation - and he made a judgement call to convert part of the BTC to an asset (NSR) that appeared to be rising opposite of BTC. One cryptojournalist covered that phenomenon here: http://dcmagnates.com/nushares-lone-bright-spot-in-sea-of-red-continue-winning-streak-into-2015/
@GreatScott didn’t.
I see this questioning a form of post-action reviewing leading toward future improvement, It’s part of community learning prpocess.
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Try and imagine how long it will be for the recent dilution hit we all just took to get burned off instead of how many dollars are being spent on the NSR order books.
I understand the following:
- This site is no longer up to date: https://nubits.com/nushares/introduction
- There are no more dividends.
- There are about 60% of the money of investors destroyed.
3.b Obviously no NSR be bought back. - There is no plan
current: 1 btc = $ 250/1 NSR = 0.000013 / 0.0000123 btc
What portion needs to be updated? Are you referring to this: “1,000,000,000 initial NuShares have been created, and this supply will increase at a rate of approximately 2% per year.”
If so, I agree, that needs to be re-written to clarify the NSR supply metrics:
There are no dividends scheduled for distribution at this time; this does not mean that there will never be another dividend.
How do you arrive at this number, and who are the “investors” you are referring to in this case?
This is a random comment with no supporting evidence. NSR buy-backs conducted by custodians to then be burned are a mechanism that could be used by the network, but unless I’m completely missing something, has never been a publicly stated commitment by any of the active custodians.
To have a plan one needs to understand what is being planned for – you enumerated a list of items but didn’t explain what you are alluding to. Help us understand your concerns so we can appropriately respond.
CMC lists the average price of NSR over the last 24 hours as 0.00001400 BTC/NSR ($ 0.003523/NSR). This certainly isn’t the highest that it has traded for, but it also isn’t the lowest.
It’s clear it’s been a pretty dismal last couple of weeks – there are obvious effects of the loss of confidence in (or outright availability of) our previously active NSR markets on BTER, CCEDK, and Excoin, coupled with the net effect that the 100M NSR auction had on demand and pricing.
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CMC lists the average price of NSR over the last 24 hours as 0.00001400 BTC/NSR ($ 0.003523/NSR).
Recent days trade had very small volume. about two hours ago somebody put 400k NSR on sale for 0.00001238 on Bter, so that is real price. and it is far too low.
am i wrong or this has something to do with recent tender of 100M NSR?? Is somebody who bought new nushares selling them and lowering the price?
Anything is possible. I believe it’s less likely that it is recently acquired NSR being put on the market that is the catalyst for the lower price and that it has more to do with the ~100M NSR worth of “demand” that was met off-market.
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Poloniex:
2015-03-26 18:33:54 Sell 0.00001179 nsr 3953.91594877 btc 0.04661666
If you feel NSR are over-valued, the rational choice is to sell. If you feel NSR are under-valued, the rational choice is to buy. If you feel the Nu network is under-performing relative to its potential, introduce motions or vote for new custodians.
Shareholders are owed nothing except the value they create.
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Personally, I think it was a huge mistake for the grants maintained by @KTm and @jmiller to lose the dividend feature. Shareholders need an incentive to do their part in maintaining the health of the network … not to mention that a lot of shareholders have an interest in providing support to Peercoin. I can say that my personal investment decisions had a lot to do with this feature of the protocol.
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I have put together this motion for the shareholders who would prefer dividends to NSR buy backs. It will not change any current proposals, but it will make sure your voice is heard if it passes.
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