There are a number of reasons that this action was taken.
- The grant had taken significant losses from the recent BTC decline and the market was showing indications of possible further decline into the 100‘s
- The grant was continuing to take losses from usually being on the wrong side of the market - traders tending to buy up BTC in bull markets and sell it in bear markets
- Receiving pressure from the NuBits team to take action to stop the bleeding
- Not being interested in futures hedging since this would require the involvement of yet another exchange and quite a lot of babysitting until an automated solution is implemented
Taking these reasons into account, I decided that an immediate attempt at reducing risk was necessary. The losses taken prior to these actions was approximately 95,000 NBT of the original 200,000 NBT grant. A breakdown of the balance has recently been provided in other threads, so I will not do that here, but consider what these losses would have looked like if BTC had kept falling to the low 100’s or lower.
The NSR buying took place over the course of about a week, at the end of January, and was quickly abandoned once it became clear that BTC was stabilizing and NSR was continuing to decline. There was never any intention to hold more than a million NSR since the majority of the funds were necessary for maintaining the peg. This NSR has never minted or contributed to any vote. It was an easy plan since it did not require moving funds to a different exchange. Other currencies were considered for this purpose but NSR was the only one with decent liquidity and an indication that it rises when BTC falls. The plan was discussed with Kiara, Ben and Pennybreaker before it began.
I can understand why shareholders may feel like this should have been discussed openly. I maintain that my actions have always been with the best interest of the network in mind. At times, this has meant making judgment calls about when to share information for the purpose of avoiding a panic. If after reading this, anyone feels compelled to criticize these actions, I would like to remind you that when the grant was originally passed it was intended to provide sell-side liquidity and then distribute the proceeds as dividends. This has changed drastically, at the request of shareholders, and has turned into a six month long operation that has consumed hundreds of hours of my time and many nights of lost sleep. If you would like to see things done differently, I would strongly suggest that you draft a motion to take over these responsibilities. I can promise that it will have my immediate vote.
Grant balance reports will be provided before each of the planned burns and when the remaining balance at Bter is verified.
Jamie
