Proposal New Model for NSBT

I know that NSBT model of collaterlizing USDn is rather different from DAI’s method (by collateralizing ETH).

DAI’s method can grow as much as people are willing to put forward their ETH to collaterlize DAI. There is no limit (subject to market need) to create DAI as long as people are willing to put forward their ETH.

NSBT’s method is to collaterlize it with an initial 30,000,000 WAVES and pairing it with NSBT to over collateralize it. And now with NSBT being limited to 2.8m supply, eventually it would come to a point when USDn would freeze in its step.

As far as I understand it, DAI’s returns are pitiful (staking returns, if any). That said, DAI has reached Billions USD in capitalization and USDn merely 111m USD. I can relate to the fact that DAI has little returns in staking returns.

NSBT’s method has higher returns by comparison but the method has limits (added to the fact that now NSBT is limited to 2.8m supply) - waves owners may not want to “mint” NSBT from the smart contract. In conventional finance, we call it “under capitalization”. In traditional corporate finance, we can expand share base as required to capitalize the company to do a bigger business or expand. I understand comparing it this way is a bit limited, but there are parallels.

However, this led me to think of a new model (and I have been thinking about it because I want to resolve the BTCn problem - BTC mooning and NSBT still remains on earth). We can incorporate and learn from DAI’s model with a slight twist. Accept Waves/BTC/ETH as collateral and issue USDn as per DAI’s model. NSBT’s purpose still remains, but now it would get the returns from this collateral pool and distribute to NSBT’s owners, while the pool is “leased out” to or even to ETH’s aave or compound pool where necessary.

If BTC/ETH/Waves moon, there is no problem with USDn backing since it only gets stronger.

If BTC crashes (as it should), then the smart contract forcefully liquidate BTC when that happens

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Hey! NSBT isn’t (and was never planned to be) a collaterization instrument for USDN. Initially it was designed as a recapitalization tool to help the contract keep the BR above 1. Multi-asset collaterization for USDN is an interesting idea, indeed.

Thanks for allowing me to understand better.

That said, it is basically to ensure there is some form of backing for the circulating USDn.

I think the protocol should not prevent BTC / ETH being used as backing.