do we have access to t4-t5-t6 liquidity? i mean info, not control.
a site showing these numbers would be awesone
do we have access to t4-t5-t6 liquidity? i mean info, not control.
When we make it multisig, you can just look at the address balance. T5 has nothing right now.
and we shouldn’t forget about the montly NBT amount produced to pay the LPs. currently >10k per month
Yah, but we have been consistently giving out those NBT every day and yet we still went under 40% sell today. It seems clear to me that there is demand for us to expand our NBT marketcap. The question is what the best method is for cementing that demand into our NSR marketcap; clearly we keep doing NSR buybacks, but maybe a small ppc distribution would also be well timed.
I do think it would be instructive to know how much T4 buy side we have after today. It may be better to modify the OP to simply buy PPC using T4 funds.
Edit: Completely changed OP
Any comments? I want to hash, but no one’s commented since I completely changed the draft.
I like it how this motion creates a rule set of what do to based on defined thresholds.
Let me see if I understand this right
There’s a limitation of money that is used for NSR buybacks for tier 4 funds below $150,000 to $7,000/week, but if tier 4 is above $150,000 10% of the excess are available for NSR buybacks?
That would mean with tier 4 at $160,000 only 10% of $10,000 would be used for NSR buyback, right?
Don’t get me wrong - I think dividends in addition to NSR buybacks is the way to go.
What I find problematic is that all buy side liquidity in excess of $150,000 shall be used for PPC dividends.
What if selling 100,000 NBT piles up to the current tier 4 buy side funds?
As PPC leave the Nu ecosystem this creates danger for the peg stability
If the majority of revenue were being distributed as dividend, the rational choice for NSR holders (if things really go pear-shaped) is selling NSR instead of bailing out Nu.
Selling NSR makes protecting the peg by selling granted NSR even harder.
My take is that Nu can only afford a fraction of the revenue being paid as dividends.
I’d rather have 7b4955e91781e0e32f1e0c0c974fd4a7a9f972a3 untouched, lower the threshold at which PPC distributions kick in (to to something between the $150,000 from this draft and the $80,000 from 7b4955e91781e0e32f1e0c0c974fd4a7a9f972a3), but create a ratio that is used for PPC dividends.
This way there’s a buffer between $80,000 and $120,000 in which only NSR buybacks are conducted.
If the tier 4 funds are below $80,000 nothing happens in terms of distribution.
If the tier 4 funds are above $80,000 and below $120,000, liquidity in excess is being used exclusively for NSR buybacks.
If the tier 4 funds are above $120,000, liquidity in excess is being used evenly for NSR buybacks and for PPC dividend distribution.
If the tier 4 funds exceed $120,000 Nu is in such a good shape that it can afford paying dividends in addition to conducting NSR buybacks
Tier 4 funds are at $200,000 for whatever reason (NBT sale, rising BTC rates…).
$80,000 are excluded from calculation of NSR buyback and
$120,000 are excluded from calculation of PPC dividend.
That’s $120,00 in excess regarding the NSR buyback motion. 10% of it or $10,000 are being used for NSR buybacks.
And that’s $80,00 in excess regarding the PPC dividend motion. 10% of it or $8,000 are being used for PPC dividends.
Does that make sense? Having a buffer before PPC dividends kick in?
Remark: current tier 4 buy side is at 443.9 BTC (466.2 BTC - 22.3 BTC). At current rate of $445 that’s $197,535.5
If NSR buybacks and PPC dividends were based on this amount, it would be close to my example above
I’d very much like to have variable values for the thresholds (in relation to the total NBT in the wild) instead of fixed amounts like $80,000 and $120,000.
If Nu needs to sell NBT soon, because of rising demand for NBT, the buy side buffer should be increased accordingly.
I can’t imagine the peg being safe with an untouched amount of buy side buffer in a future in which double, triple or even more the NBT is out compared to now.
But that might be something for a different topic.
So I totally get what you’re saying, and it was my first instinct too. However, the actual underlying reason for this grant is to reduce counterparty risk. If we kept a % rate for both dividends and buybacks, we could still enter a spiraling scenario wherein we sell a lot of nbt and end up with tons of btc (>>$150k) in T4 for long periods of time.
Then again, if T4 grows out of control we should have time to pass a grant or motion to take care of it in a different way. However, what method do we have for reducing counterparty risk other than nsr buybacks and ppc distributions? If we assume that a buyback should have a maximum market velocity to avoid pump and dumps, we are basically forced to do ppc distributions to lower counterparty risk.
Edit: development, donations (a la red cross), and growing liquidity operations are all counterexamples to what I just said. Maybe what @masterOfDisaster suggested would work just fine.
I think it is reasonable. Too much time has elapsed with no dividends. I think it is important to show that NuShares are real assets that putt money in your pocket, even at a small rate, when the dao that Nu is is going well, which seems to be the case right now.
I don’t see the need for hurry. Tier 4 buy side has been high for a long time. It was voted on reducing it, but without throwing out the baby with the bath water.
I’d rather increase the 10% in excess of $120,000 to a higher value than to have all in excess of $150,000 at once.
How shall Nu treat the next NBT sale?
Conceptually the revenue of selling NBT ends up at tier 4 buy side. That would mean another PPC dividend distribution if the $150,000 are hit (again).
What about 25% for dividends for tier 4 buy side liquidity in excess of $150,000? That alone (NSR buybacks not considered) would reduce the excess of liquidity in 4 weeks to (3/4)4 or 81/256 which is below 32%.
4 weeks is not much time and NSR buy backs will do their part.
Please, anything but 100% PPC dividend.
I like what you’re saying and will probably accept the modification. However, devil’s advocate, what are you scared of? I’m assuming your concern is that someone buys a billion nbt, we distribute a billion USD of ppc, price of ppc crashes afterward and attacker sells a billion nbt, which we have no chance of catching.
Actually, that’s a pretty bleak scenario, isn’t it?
Dividends and share buybacks have zero difference in terms of total value transferred to shareholders. Because of this, we should choose the method that we think generates the best publicity for NuShares.
I can see the value of this motion; many people don’t understand buybacks very well, whereas dividends are easy to understand. I still think that buybacks are preferable at this stage because the vast majority of our current new userbase comes from people who see NSR rising on coinmarketcap.com. I also prefer buybacks because shareholders (so far) don’t seem to be taking profit after buybacks occur, further amplifying our gains on CMC.
So, I think this is a great motion that I probably won’t vote for while buybacks are still ongoing.
More or less exactly that.
Distributing all revenue as dividends leaves little incentive for NSR holders to defend the peg and it leaves little tools to do that.
In times of pressure on the peg in which NSR grants would be required to support the buy side, Nu and NSR holders might compete in selling NSR.
I consider stuffing a sufficient part of the revenue (please don’t ask me what’s sufficient; I can tell you after the event ) into Nu value by performing NSR buybacks necessary.
As I realize that PPC dividends can have a positive effect on the total Nu value (demand for NSR because of the dividends -> rising NSR price), I very much appreciate PPC dividends.
I just consider a majority of revenue being paid as dividend unsustainable.
That’s why I’d like to have it connected to NSR buybacks and leave room for NSR buybacks before PPC dividends are being paid.
If this were only a one-time effect, I’d find it ok.
As I said before: conceptually each sold NBT (sold from Nu to the market) hits the tier 4 buy side. This motion would apply to a sale of 1,000,000 NBT.
I can’t imagine having $850,000 distributed as dividend, $80,000 on tier 4 buy side without posing danger to the peg.
Why not do doing weekly dividend distributions together with NSR buybacks to melt down the tier 4 buy side?
As both motions are dealing with percentages of funds in excess, they distribute a lot if there’s a lot in excess.
The only “drawback” I see is that the dividends paid over weeks should create demand for NSR which reduces the effectiveness of NSR buybacks in terms of number of NSR that can be purchased for the same amount of USD.
The new NSR holders could sell the NSR after having received the dividends. But they could hold them for the next round.
Do we really consider that a drawback (pushing the NSR price with PPC dividends)?
Sold NBT need to be matched by an increasing NSR rate, because the NSR value is the distributed collateral for issued NBT.
This value is required if demand for NBT declines: to buy back NBT from the market with issued NSR.
That’s (except for some buffers) the only way to do it, if Nu wants to stay free of reserves.
I see a big benefit for Nu’s situation by combined NSR buybacks and dividend distributions that are done over time.
Dividend distributions - especially when done over weeks - likely have a positive effect on the NSR price as well
Wouldn’t you want to buy NSR if you did know that x thousand USD need to be distributed as dividend peer week?
I’m convinced, let me sleep on the parameters and I’ll change the OP tomorrow.
For buybacks I think it would be a advantageous to put larger chunks of buyback funds at below market price and perhaps keep it there. It seems that people have been dumping NSR at lower prices to bet on a BTC jump. On the other hand, we also want to quickly transfer value to NSR to avoid BTC volatility.
Well, to me there is a big difference. In dividends distribution, I do not need to lose voting power (sell shares) to get some profits.
At the same time, distributing all profits in dividends is not desirable.
So I am in favor of a hybrid distribution: dividends + buy backs
Can you provide evidence for that claim?
a small difference between dividend and buyback – dividends give windfall to excanges.
Alright, ready for a new round of criticism. @masterOfDisaster is it to your liking?
Always and only trying to improve things (even if that requires shutting up from time to time)…
Let me have a look to find out whether I consider it a version I’d be happy seeing it pass a voting.
I haven’t thought about scheduling the dividend distribution and the NSR buyback in a way that allows NSR holders collect a dividend first and sell NSR afterwards.
I’m not sure whether I find it necessary, but I rather like it.
But I struggle understanding the terms. If the dividends are calculated the same Saturday as the buyback is, wouldn’t the dividend distribution need to happen earlier than 11 days after that?
The current wording gives room for accumulating NSR to receive a dividend for holding NSR a few days.
I would really prefer having dividends distributed first and the NSR buyback afterwards, because it would allow (long-term) holders to receive a dividend and sell the NSR then (which I consider more fair than rewarding NSR holders that hold NSR for a few days with a dividend).
Or do you mean to have the dividends distributed 11 days after the NSR buyback, but with a timestamp 11 days in the past (to effectively have the point of time for dividend distribution first and the NSR buyback afterwards)?
nud distribute <cutoff timestamp> <amount> [<proceed>]
If so, I’d like that, but the motion needs to state that clearly.
I’m not sure which has a bigger effect on the NSR price: the dividend or the buyback.
I think no one can tell in advance and Nu needs to find out.
I expect an announced dividend distribution to have a positive effect on the NSR price.
And I expect an NSR buyback to have a positive effect on the NSR price.
Postponing the NSR buyback after the dividend distribution might have a negative effect on NSR price, which would then allow Nu buy back more NSR for the same amount of money.
I can’t say that I don’t like that
All this is a little bit academic, because the dividend distribution and NSR buybacks will (based on current BTC price) be conducted for weeks while the assessment above is strictly only true for a single week.
I have to say I am pretty happy with the text of this motion