[Withdrawn] T4 Dividends

[cryptog]

a0a57d12ec67ac6816532f8a0afffd9b7ce14329 verified and voted.

[cryptog]

@assistant motion vote a0a57d12ec67ac6816532f8a0afffd9b7ce14329

[assistant]

Hi @cryptog

Here are the details for the Motion Vote on a0a57d12ec67ac6816532f8a0afffd9b7ce14329:

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##a0a57d12ec67ac6816532f8a0afffd9b7ce14329
Blocks: 3221 (32.210000%)
Share Days: 913707163 (30.016345%)

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[luxiang7890]

Dividend is to reduce the value of NSR, repurchase is to enhance the interests of shareholders, to enhance the market value of NSR, but also to enhance the visibility of NSR, absolute support for the repurchase, at this stage does not support dividends.

[Nagalim]

I disagree that dividend reduces the value of nsr. It reduces our positive liability without directly contributing to an increased price, sure. However, there are beneficial consequences to shareholders having on-hand liquidity during a period where most shareholders have most of their liquidity locked up in shares to anticipate the buyback.

[cryptog]

New executor required by January 18, 2016

hat buybacks have approached $20,000 per week.

in New executor required by January 18, 2016

I hope we would start to distribute dividends soon.
Imagine that instead of having 20k of buy back we have 20k of dividends.
Assume that you have 1m NSR.
It would give you 100 NBT a month. Not bad.

[Nagalim]

It’s not instead, it’s in addition to. So we would have given ppc to everyone that held in addition to the buybacks to those that sell.

[Dhume]

I especially like an occasional dividend distribution as a means of a marketing tool.

[tomjoad]

One consideration is that as time progresses, dividends will become less and less efficient due to NSR abandonment. Any NSR that is abandoned or forgotten about will still automatically receive PPC dividends. This represents lost shareholder value. The key difference is that buybacks deliver 100% of the value to all active shareholders, but dividends deliver 100% of the value to all shares, regardless of activity.

Because there is no difference between buybacks and dividends in terms of value delivered to shareholders, we should prefer buybacks more and more as time progresses.

[Dhume]

Oh I didn’t realize this, is there no way to not distribute PPC to “NSR” addresses that do not claim them? For example in say an X week timeframe? Does this also mean there might be considerable unclaimed BKS from the BKS distribution? Do we have any data about this or is technically not possible?

[tomjoad]

Oh I didn’t realize this, is there no way to not distribute PPC to “NSR” addresses that do not claim them? For example in say an X week timeframe?

My understanding is that dividend distributors can only specify a snapshot time for distribution, which doesn’t allow filtering of NSR addresses by activity. And, once PPC are sent, they cannot be collected back by the dividend distributor.

Does this also mean there might be considerable unclaimed BKS from the BKS distribution? Do we have any data about this or is technically not possible?

It’s probably not very likely. NuShareholders all made significant investments to acquire NSR initially and I doubt there are many abandoned NSR right now, meaning most BKS will have been claimed.

[huafei]

the price up with buyback ，but we don’t want to sell some nsr as “dividends”

[cryptog]

there is no difference between buybacks and dividends in terms of value delivered to shareholders,

I disagree. You need to sell shares in order to profit from share buy back. So you are losing voting power.

[tomjoad]

You need to sell shares in order to profit from share buy back. So you are losing voting power.

That’s not quite correct. A share buyback reduces the total supply of shares. If you don’t sell NSR, your equity percentage (and voting power) increases every week that buybacks occur. You can keep your total equity percentage constant (say 0.5% of the network) by selling shares after every buyback week.

If your total equity percentage remains constant, so does your voting power.

[cryptog]

by selling shares after every buyback week.

My bad. You are right.

[mhps]

Exchanges will pocket dividends paid for their users’ NSR fund.

Price surge of PPC when acquiring dividend PPCs and price depression after dividends wil cause a loss of value.

[Cybnate]

One consideration is that as time progresses, dividends will become less and less efficient due to NSR abandonment

Same for BCE over time

Exchanges will pocket dividends paid for their users’ NSR fund.

Price surge of PPC when acquiring dividend PPCs and price depression after dividends will cause a loss of value.

Sounds like the whole dividend framework is broken or will be broken soon. Are there still circumstances when we would choose dividends over buyback? Or should we remove the obsolete code from the client?

[mhps]

Are there still circumstances when we would choose dividends over buyback?

Dividends is good for periodically distributing small (compared to PPC market depth) amount of profit. Shareholders have expectations when dividends will arrive, and pull funds from exchanges (or force exchanges to give dividends to users’ accounts).

[Nagalim]

I’m withdrawing this. I think we should focus on making a PPC reserve before we work out a method for dividends.

[crypto_coiner]

A share buyback reduces the total supply of shares

However, the total supply of shares is different from the total supply of voting shares because of NSR FLOT reserve, which is tricky to calculate one’s voting power.