Updates

Nu

Why NuBits peg dropped and how it got fixed

1) What happened in May and June:


Just after the large NuBit sale by a single holder on May 27th, the peg was immediately lowered to 0.95. That is the cause of the failure of the liquidity engine. Period.

Then NuShareholders and the Liquidity team focused on:

- Focus on nsr buy back which lead to fund depletion  and complete halt of funds in tier 4, 5 and 6.
The result was: US-NBT went straight from $1.00 to under $0.20 while NSR went from 500 satoshis to 70 satoshis. 

Between June 2016 and September 2016, about 700 million NSR were spent repairing the damage from the reckless and unauthorized "experiment" 

 

We dont know where the attack came from --
It could have come from a nushareholder

 

2) What we have learned:

Directing liquidity operations effectively and efficiently requires expertise very few have. 
Liquidity operation needs to be centralized for now and decentralizing liquidity operations again is a long way down the priority list.
BUT the decentralized nature of the NuBits network remains unchanged. None of the changes NuShareholders have instituted in liquidity operations requires a protocol change. The basic deal and mode of the network remains unchanged. Transaction processing, voting of all kinds and most importantly, the allocation of custodial grants remains completely decentralized and unchanged from how it worked in 2015.

We have a chief liquidity officer: Phonenix (probably the second name of Jordan Lee, the founder of NuBits) -- He raised $300,000 in the two and a half months he has been CLO

NuShareholder must prevent a loss of peg on nubits, because it will be reflected back immediately on nushare

To sum up, NuShareholders would like decentralized liquidity. However, reliable and cost effective liquidity is a much, much higher priority.


3) A lot of debate is going on about:
- whether we should have a business model
- to which extent we should back up US-NBT in reserve.

However Phonenix (not supporting any business model and any model) has earned the consensus by voting (64% of support)
His popularity is growing
Minting is picking up
He is getting paid for his role.


4) Asset price:

We have boosted the asset price without parking, without reserve
400% in 70 days


5) What we are doing now:

We have resumed the selling of US-NBT since the peg was abandoned in late May. When we sell US-NBT from liquidity operations, the funds become part of our reserve and are used to place US-NBT buy orders at $0.995. 

The US-NBT price on Poloniex has stayed within the $0.995 to $1.005 range for all of the last 24 hours. There are $5600 in buy orders at or above $0.995 and an impressive $39,000 in buy orders above $0.975. That is probably more than 13% of all the US-NBT in circulation.

6) The future:

Launching CN-NBT and EU-NBT 

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blog   2016/10/07   gbboy

NuBits: achievements after 15 months of operation [part-2]

"- A healthy core mechanism that has been established

NuBits is NOT backed by fiat reserves but by the value of the issuing "bank" like corporation Nu.

NuBits (NBT) get sold by Nu for BTC and the BTC get invested in development (increasing the value of Nu), share (NuShares; NSR) buybacks and very little in marketing and other activities.

While sold NBT are only temporary revenue (the NBT in circulation are a liability for Nu), NBT get destroyed with transaction fees.
Destroyed NBT are final revenue for Nu.
Nu is still young and evolving, but the peg has been kept at exactly 1 USD.

The close peg is a direct result from the compensation that is paid to liquidity providers to put orders with a close spread on order books;

 

- NBT have all attributes good crypto currencies have:

* the blockchain is being run in a decentralized manner.
* NBT owners can have total control over their NBT by sending them to an address for which only they have the private key (an experimental web wallet is available, though).
* multi signature transactions are available to increase security and allow escrowed transactions.
* the source code is open, but compiled wallets for Windows, MacOS and Linux are available (as well as at least 2 apps for Android: Coinomi (btw. the Coinomi developer is one of Nu's core developers) and NuDroid).

 

- If there's need to adjust Nu, there's the incredibly powerful "motion" feature. 
This has been used for a lot of strategic decisions and can be used for anything that requires a consensus of those who have a stake in Nu. NSR holders (the owners of Nu) can decide what to do.
Nu is a corporation with business process on a blockchain - the same blockchain that processes NBT transactions.

 

- Meanwhile you can use NuBits for hedging crypto currency volatility.

 

- NuBits is in a unique position if the following attributes are important: 

* open source
* decentralized
* being pegged to fiat, but not depending on fiat (not holding fiat as collateral)
* stable!
 

- NuBits has successfully proven that it is possible to create a stable crypto-currency. Imagine that the design of Ethereum had been based on a stable coin (tracking say the dollar / euro) which would be used to pay for transactions and a separate share token that is used to stake out consensus.

 

- NuBits is secure:

* Nu is check-point free for over a year with no problem. 

* Relies on Peercoin Proof of Stake, to which the objections  are purely theoretical and bad theory at that. The only real argument against PoS comes down to whether you can trust humans to come to consensus about something over the long term (weak subjectivity). The fact that some governments (a long-term human consensus process) have existed for hundreds of years kinda flies in the face of the 8 years btc has existed for. Note that weak subjectivity is also used in bitcoin (btc core) and is revealing a lot of politics on the long term scale. Basically, the only flaws Peercoin or Nu have are the same flaws that bitcoin and in fact all governments and human consensus processes face."

 

 

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release   2015/12/11   gbboy

NuBits: achievements after 15 months of operation

Since inception on September, 23rd 2014 NuBits has demonstrated that it is the #1 stable cryptocurrency in the world, in terms of marketcap and transaction volume.

Definition: a stable cryptocurrency is a currency issued on the blockchain, keeping a stable value. In this case, 1NBT = 1USD

- Stability is a bliss:

"NBT has been stable since day 1"

"As long as goods and services are priced in USD, Yen, EUR, CNY, etc. the volatility of (most) cryptocurrencies is hindering adoption.
If merchants accept cryptocoin payment, they generally use payment providers who convert the cryptocurrencies in the background to fiat for them."

"So, stability is certainly not a bad attribute of a currency.  "

A user: "I have used NuBits to buy many things. And the NuDroid mobile wallet allows me to hold stable NuBits and then automatically convert them to BTC at the point-of-sale. So I have the stability of the US dollar in crypto form but I have the network reach of Bitcoin. It's really convenient and I don't have to worry about day to day fluctuations of Bitcoin."

NuVentures has used NBT on several occasions to settle the payment for its website design renewal. NBT was used as a cryptofiat or synthetic dollar to conduct an international wire transfer, virtually at no cost.

 

- Distributed direct governance enabled by the peershares/nushares template is a bliss:

"NuShares holders have a unique ability to directly vote on market policy that is aimed to provide an uncommon service to the crypto world. Pegged digital assets have existed in various forms but not to the degree and success of NuBits. It's pretty amazing to see distributed direct governance in action simply by owning a digital asset."

"The supply of stable tokens needs to be inflatable and deflatable to adjust the supply to demand.  Without that mechanism you will always have more or less volatility. Nu has this mechanism."

 

- Top transaction volume

"NuBits have had the top transaction value among stable digital currencies (BitUSD, CoinoUSD, Tether) most days, and have frequently been in the top 3-10 overall during periods of extreme Bitcoin volatility. "

 

The (near) future ahead is very bright for NuBits. 

NuVentures sees NuBits's path to mainstream adoption going through different stages.

The first stage is replacing Bitcoin as the primary intermediary currency (liquidity token for trading) in the crypto market. That shall be achieved through NBT price stability and liquidity operations. 

NuBits aims at becoming the number 1 crypto-currency. NuShares the number 1 crypto-share. Bitcoin being the number 1 crypto-commodity.

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release   2015/12/04   gbboy

NuBits and the decentralization of finance

Nu is welcoming anybody that wants to contribute to the decentralization of finance.

Nu is welcoming anybody that wants to become a shareholder of Nu, the first decentralized central bank in the world.

If you would like to become a shareholder of Nu, you will need to acquire NuShares, the assets that back the peg of NuBits to one dollar.

NuBits is free of any counterparty-risk. It is not reserve-backed.

The peg is kept solely by buy/sell side liquidity walls around 1NBT = 1USD across several exchanges.

The liquidity is provided by liquidity providers that can contribute in stand-alone mode or via decentralized liquidity pools.

Right now, there are roughly 500k NBT in existence, the buy side liquidity is around 90k NBT and the sell side liquidity around 110k NBT.

The peg has been kept perfectly since NuBits' inception in Sep 2014. Nu has more and more liquidity, with more and more exchanges trading NuBits.

 

But perhaps the biggest thing on the horizon is a totally decentralized exchange called B&C Exchange which would guarantee a very secure and cheap NuBits liquidity for Nu Shareholders.

That exchange which will be released in a few months will be using NuBits as a synthetic dollar to get in and out of the exchange.

In that sense, NuBits is a crypto-FIAT (crypto-dollar), or a crypto-currency pegged to FIAT money (dollar).

 

You have the following links at your disposal, if you would like to get more information.

- www.nubits.com: official web site

- www.discuss.nubits.com: official forum

- https://docs.nubits.com/history : the origin and the beginnings of NuBits.

 

NuBits combines the best of both worlds:

- the convenience and stability of FIAT currencies

- the decentralization of Bitcoin

 

Nu is welcoming anybody that wants to contribute to the decentralization of finance!

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blog   2015/10/12   uploada

Nu is a Decentralized Reserve Bank backing up the value of its Currency in a Decentralized and Distributed Way.

Nu has taken the model of a corp. or org. financed by shareholders , producing a service, that service being ensuring a peg for its token 1NBT = 1USD by providing buy and sell liquidity on NBT/USD/crypto markets.

When demand is decreasing, shareholders decide to invest more money (diluting their share) in their venture to burn NBT.
When demand is increasing, shareholders vote for more NBT issuing and receive dividends (direct = dividend from LPC activity or indirect = share buy back)

But NBT value needs to be backed, constantly and here at Nu, it is backed by a collateral, but not externally, internally, by Nushares value.

"In the beginning Nu's capabilities have been somewhat limited, but the NSR developers, holders and the Nu community evolved the Nu network formidably.
With 2.0 and NSR grants one can truly say that the NBT value is effectively backed by the value of NSR.

If NBT get sold from the Nu network to the market, share buy backs or dividends incorporate or distribute, respectively, the value of the sold NBT to those with a financial stake in the Nu network: the NSR holders.

A share buy back is expected to increase the price per share leading to a higher market value. The difference between the increased market value and the market value before should ideally be close to the value of the NBT that was meant to be incorporated into Nu.

With distributing dividends the value is leaving the Nu network if you look at it on a blockchain level, but economically it's still in the Nu network: in the pockets of NSR holders.

Share buy backs intend to increase the value of NSR, distributing dividends might increase the value pf NSR as well, but in the first place aim to distribute the value equivalent of the sold NBT to NSR holders.

If NBT need to be bought back by Nu, because NBT demand on the market is very low, NSR will be issued and sold.
This will have an effect on the NSR price, it will be pushed down.
But NSR holders have been rewarded for that way earlier with share buy backs or with dividends.
They are incentivized to agree with issuing NSR and selling them, because if they don't, they risk the peg and endanger all their stake in the Nu network."

"The peg is guaranteed by the Nu network. As long as the market value of the Nu network is sufficient, the peg is safe.
There's a layered liquidity model and one layer deals with selling NSR (NuShares, the shares of the "Nu network" corporation) to buy back NBT and burn them. Payouts from liquidity pools are just one of the expenses of Nu. "

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blog   2015/09/26   gbboy

Nu and B&C: Synergy between 2 Independent DAC

"The combined value of Nu and B&C Exchange is greater than a single blockchain embodying both functions. This is due to better scalability, independent release paths, greater simplicity and branding advantages."

1) Powerful synergies and mutual interests:

"There will be a powerful synergy between the Nu network and B&C Exchange, with Nu bringing liquidity to B&C and B&C lowering costs for Nu."

"B&C Exchange will be a powerful tool for significantly lowering NuBit liquidity costs because the risk of exchange default and theft will be much lower than it is with centralized exchanges.

NuShare holders will have a powerful interest in providing a great deal of NuBit liquidity on B&C because of its low cost and the broad overlap in ownership between the two networks. "

 

Nu will be supplying the liquidity on B&C so trades can happen sooner rather than later.
Without a stable cryptocurrency that is liquid, traders have nothing to hedge volatility. For an exchange to be a success, it needs liquidity.
BCE has a vital interest to support NBT trading pairs. If that requires free/cheap access to the blockchain for Nu to allow NBT liquidity providing it's a small enough price to pay for BCE.

 
 2)  There are at least two ways B&C Exchange will benefit NuShare holders.

"First, NuBits will be used as the denominator on many if not most trading pairs. The exchange will feature a BTC/NBT pair, LTC/NBT pair, PPC/NBT pair, etc. This is expected to increase the number of NuBits held, which is likely to result in dividends to NuShare holders, NuShare buy backs and burns, or both.

The second way B&C Exchange will benefit NuShare holders is by offering a NSR/NBT trading pair that will increase NuShare liquidity, which makes it a more attractive investment."

 

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blog   2015/09/04   gbboy

Why we funded Nu

Having a cryptocurrency with a fixed value is so important.

"So that it can move beyond the realm of a speculative asset and become an important facilitator of commerce. Businesses and consumers need to know what their money will be worth in a month and a year. Bitcoin has solved the volatility problem by partnering with banks via Bitpay and Coinbase, both those are centralized solutions. This will allow commerce without banks on either side of the transaction.

A currency must be fungible, transportable, divisible and a stable store of value. NuBits possesses these attributes more than any other currency in the world. We have a lot of work to do in encouraging them to be widely accepted, however. Soon, we hope NuBits will be used for lending and commerce around the world. It should be very good for international commerce.

Whereas most crypto supporters believe mass adoption will eventually stabilize price, the creators and supporters of Nu believe they have it backwards, that price stability will encourage mass adoption.

Business Model: NuShareholders provide the service of a price stable crypto. This service costs shareholders as one can see from the monthly fees Nu pays out to provide for decentralized liquidity. The job of shareholders is to continuously increase demand and adoption for NuBits. As demand increases, new NuBits are created and sold. The proceeds are then either distributed to shareholders in the form of Peercoin or NuShares are bought back and burned. The transaction fee is also one way that users of the network pay for the service we provide them. The transaction fee slowly decreases the supply over time, which then allows us to create and sell more NuBits again for profit. In the future, NuShareholders will also decide to add more pegged currencies, such as the Euro or Yuan to target different markets."

 

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release   2015/09/02   gbboy
タグ:NuBits , Nu