Critics say that BitUSD is only repackaged exposure to BTS. Does this change increase, or decrease, the risk to "normal folks" holding BitUSD, who don't want to mess with suddenly receiving BTS in their wallet instead of BitUSD?

I've been watching NuBits for a while, so I can help with some of the SWAG numbers.

Disclaimer: I have no official affiliation with NuBits. The below are my own thoughts and opinions, and of course, may be incorrect.

It would be very interesting to know how much they are making on this spread, but lets assume $1,000 per day or about $360,000 per year. Note this is just a SWAG (scientific wild ass guess).

The NuBot actually defaults to a spread equal to the exchange fee, which means no profit at all. For example, on BTER the exchange fee is 0.2%, so the spread there is 0.4% (+/- the fee in each direction). In the best case, the market maker breaks even due to exchange fees. In the worst case, clever arbitrageurs cause losses for the market maker.

Mean while their crypto-currency assets have experienced a capital loss of 50%, also a SWAG.

Most of the lifetime of Nu has seen Bitcoin around $350, so since it is about $200 today, I would estimate current capital losses of about 35%. There has also been a $50,000 dividend paid out, which came out of the asset side of the balance sheet. In addition, some losses (it's unclear exactly how much) have been incurred due to arbitraguers trading against the artificial liquidity provided by the market maker bots. On the other side of the equation, proceeds from the centralized sales of NuShares are sometimes used to prop up the peg, which they call "tier 4" support. See https://discuss.nubits.com/t/finalized-evolution-of-liquidity-operations/618

Since they launched they have sold over $2 million worth of 0% interest bonds.

That $2M number, which I assume came from CoinMarketCap, is roughly number of NBT that was issued to custodians. However, they have not sold all these; my estimate would be $400,000 to $500,000 of sales. Clearer numbers will probably be forthcoming from custodians as they improve their data reporting.

Quote from: Chronos on January 14, 2015, 05:28:25 pm

Can shorting users buy BitUSD on BTER, and then close their positions inside their own wallet by combining this BitUSD with their BitUSD shorts?

You should be able to withdraw the bitUSD to your wallet from BTER.

And then close the short? Does the availability of BitUSD on BTER solve the problem in this thread? I guess I'm missing something.

NuShares just listed separately on the main coinmarketcap page, but they share a blockchain with NuBits right?

If that's the case we would have a higher chance of getting BitUSD on the main page now too.

This is correct, and I agree. NBT (the pegged asset) and BitUSD (the pegged asset) really ought to be on the same page.

What kind of buy support does BitUSD have?

Well, I decided to do a little research on my own question. Below is a screenshot from just now, from the BTER BitUSD/USD market.

If you are willing to accept a 2% loss, you can sell $200 instantly. If you are ok with a 3% loss, add another $213 to that. At a 4% loss, sell another $162. If you have more than that to sell, it won't be easy. Also, even if you have just $10 to sell, you still won't get the pegged price, because $1000 in sell orders must be cleared out before the market can move to its "pegged" value. This could be inhibiting merchant adoption.

This makes me realize why NuBits has so much more trade volume than BitUSD right now. It's tough to compete against $140,000 of pegged buy orders with $500 (at best). It's an uphill battle.

Rates will have to rise way more than 0.002% before they'd be any indicator of the health of the peg. A better metric would be the amount of buy offers for NuBits at the pegged $1 price. Right now, according to the client (which reports via RPC), it's at about USD $140000, spread across a couple different exchanges. This means that, if $140000 of NuBits were suddenly sold, the peg would be in trouble.

If that number goes down, that's bad for the network, but if it goes up, it's a sign of growing demand.

There is no way anyone would buy thousands of NBTs without purpose at the moment. Or all the buyers are unaware that they buying the 1 USD and not the crypto share Nushares.

Well, there are a few reasons, such as parking incentives. However, the volume shocked me, too. I would guess that quite a few buyers did not realize they were buying a pegged asset.