Updates

custodians

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

Inflation adjusted NuBits

Just pegging NBT to the USD is not good enough for people who are worried about the Dollar inflation.
The good news is that Nubits can be more stable than USD, by adjusting its value in real time vs inflation.

But this is not a priority right now and will be implemented in second step.

This is how we would implement an inflation adjusted currency:

"Someone would advance a motion proposing the character and code we will use to define the currency, as well as its marketing name. They will also propose the use of a particular source and methodology for measuring inflation/deflation.
If passed, the dev team would need to make some minor changes to the code to include the currency.
Supply would be introduced the same way as NuBits, and on a monthly basis custodians would adjust the peg by configuring NuBot with the adjustment indicated by the economic data source chosen by shareholders in the original motion. This could be a downward adjustment in the unusual case of deflation."

"We anticipate that shareholders will begin using a data feed of their choice to configure their vote rather than manually configuring it as they do today. This will be particularly important with multiple currencies because each currency will require a different management of currency supply to match the demand of the currency in question. Because the management of multiple currencies through manual shareholder configuration of voting is impractical, I strongly support waiting to create additional currencies until there is a diversity of stable data feeds offering voting guidance to shareholders."

Reminder:

"NuBits is intended to the the first implementation of a currency deployed on the Nu block chain. The white paper discusses the idea of an inflation adaptive currency that could also be developed. There's a discussion that has been going on over at the Nu forums that starts to dig into what it could mean and the economic theories that support its creation:"

http://discuss.nubits.com/t/pegging-the-buying-power-of-1-2014-not-1-itself/148

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blog   2015/09/02   gbboy