SURF priority over NSBT


NSBT was supposed to be the instrument to recapitalize USDN when BR fell below 1. NSBT design was however deficient because the max amount was limited and the moon factor was introduced to effectively limit it’s circulating supply even below the max authorized amount.


Now USDN is woefully undercapitalized so SURF was issued to recapitalize. The only way SURF could ever have sufficient incentives to attract investors and recapitalize is if it took complete priority of NSBT. Without the additional benefits of receiving gNSBT, SURF is nothing more than a way-out-the-money call option on the WAVES price.

If NSBT would have been better designed, then its supply wouldn’t have been limited and when BR fell then more NSBT would have been issued, which would have been dilutive to existing NSBT holders.

Similarly, SURF should dilute existing gNSBT holders to a much greater extent than it currently is in order to be sufficiently interesting to investors.

How to allocate more gNSBT to SURF stakers without increasing the total amount of gNSBT too much so as to risk destabilizing USDN by allowing too many redemptions per day? This can be solved by changing the parameters on how many swaps can be made as function of gNSBT owned.


Urgent action is required.

Many more SURF and NSBT need to be issued to recapitalize.

Action 1 - Remove the limit on NSBT authorized amount (maximum amount) and adjust the moon factor accordingly.

Action 2 - Increase by about x10 the amount of gNSBT per staked SURF.

Action 3 - Recalibrate Neutrino parameters so as to keep the max\avg amount of USDN swapped per day stable, taking into account that the total amount of gNSBT has and will continue to increase.

Other Actions - Other actions exist such as taxing node operators to take a % from their fees and adding it to Neutrino reserves, but this is beyond scope of this proposal / discussion.


If no action is taken then NSBT holders will canibalize themselves until there is nothing left to eat.

This proposal is outright destructive to everything that was achieved to date, it will destroy stability of governance scheme which served us very well. Messing with SURF power will result only in erosion of current long term consesus mechanism and replace it with purely capital driven and short term / temporary one. It can even take us down if we sell voting power to cheap (which this proposal is about) with no real gains in BR as there is very little demand for SURF to begin with. We need governance update first to see if current system even works. Moon factor on pair with current gNSBT to SURF exchange rate are good for the system of governance. They both protect us all from external bad actors ad it should stay this way.

Also it is good to keep i mind that SURF was not meant to heal BR on its own as it is mathematically impossible to do. it was designed only to help but the heavy lifting has to be done by market maker by moving Waves price up. Realistically SURF can only do 20-30% (and if that happens we should view it as a great success) of the work the rest is up to markets.

So in conclusion thank you but no thank you.