Fuzzy, I probably should have explained things a bit more for you, since you haven’t been around. I didn’t explain because this is all well known by everyone at this point. It has become the common joke around here. We don’t know exactly what has happened with him, but there are two theories. Either he is truly trying to scam people, or that he believes so much in his system that he became corrupted and tried to secretly take ownership of the network for himself. Let me explain what happened and what most previous NuShareholders believe happened.
It all started with this motion…
When our network began, we had a way to increase the NuBit supply at the will of shareholders. We then decided to add a way to decrease the NuBit supply at the expense of increasing the NuShare supply (due in the 0.6.0 release). It should not be surprising then, that a mechanism for reducing the NuShare supply would also be introduced, to complete our flexible supply of both shares and currency.
Specifically, I am proposing that in most cases, instead of distributing dividends, proceeds from the sale of NuBits be used to purchase NuShares in the open market, which are then burned. This is commonly done with equities and is known as a share buyback. Due to low liquidity in the NuShare market, we can expect such activity will have a marked positive effect on the NuShare price. This high NuShare price will enhance our ability to sell NuShares later when we are in the opposite part of our economic cycle and need to support the NuBit price. Therefore, we will have two complimentary mechanisms which are the exact inverse of one another:
- When NuBit demand is low, NuShares will be created and sold while NuBits will be purchased with the proceeds and burned. NuShare supply increases as NuBit supply decreases. This depresses the NuShare price as it supports the NuBit price to the pegged level.
- When NuBit demand is high, NuBits will be created and sold while NuShares will be purchased with the proceeds and burned. NuBit supply increases as NuShare supply decreases. This inflates the NuShare price as it suppresses the NuBit price to the pegged level.
This motion was the beginning of Nu’s downfall. What ended up happening is that we did NuShare buybacks with most of our reserves, placing the reserve value in NuShares, leaving us with only a tiny reserve left in Bitcoin. When Bitcoin started rising in price about 4-5 months ago, everyone was selling their NuBits, which put tremendous strain on the peg. Our Bitcoin reserve was wiped out pretty quickly. We tried to delay running out of Bitcoin by offering to buy NuBits back at $0.95 instead of the normal price, that way we had enough time to do NuShare auctions to raise additional funds to support the peg. However, Jordan’s system linked above failed. As soon as people realized Nu was bankrupt, NuShares collapsed in price and nobody wanted to buy a depreciating asset like that. With no way to draw support from NuShares like planned, the peg went into freefall.
About a week or two later, Jordan returned under a brand new forum name, Phoenix. We didn’t realize it was him at first, but it quickly became obvious. He had the exact same personality, writing style and made the exact same arguments. It was not known why he changed his user name and he wouldn’t explain it to NuShareholders when asked about it. He simply ignored it and made it his sole mission to restore the peg.
Shareholders were discussing about how this happened and exactly what went wrong and how we could fix it. Jordan’s NSR buyback program was listed as the single largest cause. Then there was also the fact that Nu had no actual way to earn revenue to continue operation long-term. Revenue was supposed to be earned through on-chain transaction fees, however NuBits were mostly used off-chain on exchanges. Our liquidity operations to support the peg are expensive. With no revenue to cover these expenses, even without the NSR buyback program, Nu would have eventually run completely out of funds to support the peg.
So ways to incorporate revenue were being discussed and even some motions popped up detailing how we could run a sustainable operation and maybe even make a profit. Jordan/Phoenix didn’t want to hear any of this though. He setup motions to begin the process of restoring the peg. probably something like 90% of people on the forum were voicing opposition to his plan, because they didn’t want to restart Nu until we were able to incorporate some kind of revenue scheme into the system. Jordan/Phoenix ignored all pleas from shareholders to incorporate ways to earn revenue and didn’t think it was important to discuss. Shareholders were so upset with him because they wanted Nu to be sustainable in the long-term. Simply restarting Nu without a proper way to generate revenue would end up leading to the same result in the future. Nu would end up running out of reserve funds to support the currency due to the costs incurred.
Jordan/Phoenix then began setting up motions that created a position know as Chief of liquidity Operations and began actively campaigning to take this role for himself. This role meant that he would be the sole decision maker when it came to liquidity operations. He was trying to centralize all power to himself. He would control the funds and he would decide what to do with them. And suddenly all of his motions started passing in the face of overwhelming opposition from shareholders on the forum. It didn’t make any sense. How could his motions to centralize power to himself all be passing when pretty much every shareholder on the forum was against him?
There was one possible explanation that people kept coming back to. Jordan/Phoenix purposefully sold us all on the NSR buyback program knowing that it was going to crash the system. While shareholders were conducting NSR buybacks and raising the price, Jordan/Phoenix was on the other end selling his NSR into the buybacks and getting BTC for it. Once the buyback program ended and Nu’s BTC reserve was tapped out, it was only a matter of time until BTC started rising and Nu would run out of funds to support the peg. Once NuBits went into freefall and NSR price collapsed, Jordan most likely used all the BTC he earned from selling into the buybacks and bought all the NSR that was being sold by everyone. If this is true, it means that he purposefully crashed the peg in order to achieve enough NSR to fully control the network by himself.
On the forum however he was presenting a show for everyone, claiming that real shareholders were voting for his motion while simple forum posters were against it, while in reality the most likely scenario is that he pre-planned all of this and that he was now most likely controlling voting by himself, pretending for the public that shareholders still had full control. And then mhps came out with this analysis of Nu’s blockchain, confirming what we all feared: https://discuss.nubits.com/t/voting-address-census-who-are-voting-for-what/4300
NSR auction started being conducted to raise enough funding to restore the peg. Massive amounts of NSR dilution was required in order to make this happen. It’s possible that Jordan or friends of his were the ones that were buying, but we don’t know this. The peg was restored recently and Jordan/Phoenix asked for a massive performance bonus of 110 million NSR here…
After criticism from the community started, a bunch of brand new accounts popped up out of nowhere supporting him and all of his posts. We believe these were just more sock puppet accounts of his. Jordan/Phoenix then posted the following…
He is now just handing out NSR like they’re candy to brand new forum accounts simply for agreeing with him, most likely another way to get more NSR for himself.
Here is a thread showing that much of the dev funds for B&C Exchange simply went missing. Jordan/Phoenix controls it and refuses to answer any of our questions.
While Jordan seems to control all of Nu, it is obvious he doesn’t control B&C yet. He does control a significant amount of BlockShares, but not enough to control all voting. Anyway, when B&C was first trying to raise funding for development, it was said by Jordan that we were not able to raise enough. Suddenly these seed investors (who never posted publicly) magically came onto the scene and funded a lot of the goal for a large portion of the shares. We did not think anything of it at the time, but now we are starting to realize that these secret seed investors were most likely Jordan finding a way to get like 30% of BKS for himself without having to put in any funding.
Anyway, he doesn’t control B&C yet, even though he does have a large share. Because of this, we were recently able to pass a motion to form a multisig group that is supposed to take over B&C dev funds from Jordan/Phoenix once 6 individual multisig members are elected. However, another brand new forum account has popped up because of this development (most likely belonging to Phoenix). This new account is making threatening posts indicating that Jordan/Phoenix most likely will not comply with any motion that B&C shareholders pass that order him to hand over the dev funds. This to me seem to be an indication that the dev funds might not exist any more, but we don’t know yet. Either way, all of this is possible because Jordan/Phoenix would refuse to make any accounting public, even when asked. We trusted him too much and now it looks like we might have lost all of our dev funds to him forever.
Much has changed though recently. Woodstockmerkle worked in secret to identify the shares belonging to people who did not vote for Jordan/Phoenix’s motions and created a separate network based on that. He calls the network Augeas and NuShareholders who no longer have control over the network can claim their shares in Augeas by importing their NuShares wallet. The Augeas network has no purpose or product yet, however it is free from the influence of Jordan/Phoenix. That network was announced here…
Anyway, I understand that there is no direct proof, but there are too many things that point to this or some of it being true. Just go to the Nu forum and look around. It has been chaos over the past 4-5 months and there has been much hate for Jordan/Phoenix, even to the point that a separate network had to be created to get rid of him completely.