[Passed] Proposal to Provide Sell-Side Liquidity and Shareholder Dividends

NuShares Passed Grants
#32

It looks like you have been elected. Congrats !

Please feel free to get in touch over email/pm/hipchat for any help setting up the bot.

I remind you that when acting in sell-side mode, your sell price has to be set slightly above the buy custodian price. The current default price-increment of the bot is 0.001 USD, and it can be overwritten by setting the priceincrement parameters in the bot configuration file. The custodian is free to set this increment as small as accepted by the exchange, as long as it is non-zero.

Citing the white paper :

[custodian] should offer the entire balance of NBT for sale using the formula of one USD + transaction fee + one pricing increment. Let’s say our exchange has a transaction fee of 0.2%. Some exchanges allow the fee to be discovered through their API, while others do not. If the fee can be found through the API, it will. If not, the user should be asked to specify the transaction fee. Let’s say this exchange supports 4 decimal places in its order book on the NBT/USD pair. Using our formula above, the trading bot would place an sell order for 10,000,000 NBT at a price of 1.0021. The reason it should be 1.0021 instead of 1.002 is that we want dual side sell orders to be executed first, so their funds can be returned to providing buy side liquidit

#33

@desrever Thank you!

All,

Quick update
The grant was received about three hours ago. You can see the transaction here: http://blockexplorer.nu/transactions/fc4b489f901b33533bccb1ed23bdb419a5dd0353c2b5e126322f95b979158e42

Two transactions of 10 NBT were sent to test accounts on Bter and ccedk, where NuBot testing began: http://blockexplorer.nu/transactions/15952a40f41e9f4bff0f5cd299a1212142034563153470fabc57bfe8501cbcbf
and: http://blockexplorer.nu/transactions/ee459175db5ad2d1d5a8ce7af375d9759fe8dc4241c1baa2b462cb4fad784e16

Two transactions of 10 NBT each, were then sent to the Bter and ccedk NBT/BTC trading accounts to test deposits: http://blockexplorer.nu/transactions/7027bc25522c359a8ffee92f55b56300b93d8b159ef739506d052603e0a81259 and: http://blockexplorer.nu/transactions/ddaa0857ae231a88ac6db362dff41c0357b044393582ab71ac5601309dfb0a16

Two transactions of 5 NBT each, were then sent back to the custodian address from the trading accounts to test withdraws: http://blockexplorer.nu/transactions/25bffee94ed634ca0e1c7b04084b7cc6cdf0abd517df5d2fd1ff6dd096eaeddc and http://blockexplorer.nu/transactions/5d7a7f7fc37ace3f015f788fdc7504e4c977f00e388346f49f501ee5c26f4eb5
See if you can tell which one is Bter :wink:

Once the withdraw tests were complete, 49995 NBT was transferred to each of the accounts, to make a total of 50,000 NBT in each NBT/BTC trading account: http://blockexplorer.nu/transactions/908ae32f22ebc7f98ff6e980940689e161e3ca2a92d058a10e1dbae136c35277 and http://blockexplorer.nu/transactions/95da9d814952885e5eebe8fbcc0ef922ecbd458f11ba8940a45f8e58a8dcf4c2

Both of those accounts are now live with Nubot.

You can see that liquidity info has been updated:
{
“B7mmVdVQ1SNNcT9zuQRK1B3Cbvo8vHeoB1” : {
“buy” : 63033.84540000,
“sell” : 1315338.08780000
},
“B9fv9Di2Y4RxUHzrwjtfq5fetAhqULzWKL” : {
“buy” : 0.00000000,
“sell” : 100000.00000000
},
“total” : {
“buy” : 63033.84540000,
“sell” : 1415338.08780000
}
}

There is 103978.84 NBT remaining in the custodian account. Tomorrow I will put the other two bots online and transfer my fee to a separate address.

jamie

#34

It looks like your sell walls are placed closer to the peg than KTm’s (see below). Would you be willing to move them slightly further from the peg, so that they have a lower priority? KTm is already acting as a dual-side custodian, so that will strengthen our buy walls in the short term.

Thanks!

#35

Hey Chronos,

This is just a slight timing issue. I’m only 0.00001 above KTm sell price, so sometimes the price will change and her bot will adjust before mine does.

Current sell orders on Bter:

Price Amount(NBT) Total(BTC)

0.00267478 397523.483 1063.28786
0.00267517 35138.056 94.00027
0.00268332 1.276 0.00342
0.00273600 0.460 0.00126
0.00276000 0.460 0.00127

Current sell orders on ccedk:

Price (BTC) Volume (NBT) Total (BTC)
0.00267993 149 147.4268 399.7046635
0.00267993 149 147.42679768 399.7046635
0.00268046 23 708.2174 63.54892841
0.00268046 23 708.21739813 63.54892841
0.0032 174.73308228 0.55914586

I’ll try a slight adjustment to move them a little further apart.

jamie

#36

Grant Update

Hi everyone,

It’s been a long day of testing but I believe we’ve finally got the sell-side bot settings configured to keep my orders right above KTm’s dual side bot.

Early this morning, while the price of Bitcoin was moving pretty fast, some of the bots orders briefly ended up on the wrong side of KTm’s orders due to a timing issue between the two bots. During a couple of these instances, there were some sales proceeds, totaling roughly 18,000 NBT. I will provide a more detailed account of these numbers tomorrow.

Please, if you have not already done so, vote for my amended proposal so we can get these proceeds put back into a buy wall. Vote for 1 NBT @ BMmwnkZo61gw2m3fqRFApPS5nbW1JNwf5J if you would like to see this amendment pass. My OP has been updated with the details of this.

The remaining 100k of granted funds has not yet been added to additional markets. I have opted to stay out of the NBT/PPC market until a decision has been made about my amended proposal. KTm already has strong control of that market and I do not want to run the risk of picking up too many PPC in a declining market, this early in the life of the grant.

I will likely be providing liquidity to our new NBT/Euro market, but we’re still waiting on support for that market to be added to NuBot.

jamie

#37

We should have seen this coming. This will ALWAYS happen if two NuBot operators work on the same non-USD pair, due to timing issues in a moving market. Please keep further sell-side funds off of non-USD pairs that KTm is already trading on, until the Nu team has a chance to assess the impact. Thank you!

No buy-side liquidity for NBT on BTER
#38

@pennybreaker contacted me this morning and requested that I take the bots off of the BTC markets until a better solution is available. I will be focusing on the NBT/EUR market, for the time being.

jamie

#39

you used the same words I used filling the issue.

A software solution to this problem requires synchronisation which in turn will require either some centralisation or high complexity. Long term, we will move away from non-USD pairs. But for the time being we need a rule, and JL seems to agree.

No more than one custodian bot at the time on the same non-usd pair.

This rule requires - imho - that any future custodian proposal should include specification in how the grant will be coordinated with other custodians. This is also valid for the three LPC custodian being voted now.

Any suggestion is more than welcome

#40

Hi everyone,

Sorry about the lack of updates over the last few days. There have been some unexpected issues with the performance of NuBot. I’m working with the NuBits team to help test and resolve these.

The ~18000 NBT of sales volume that I mentioned above, turned out to be collisions with KTm’s bot. I have sold this BTC back to KTm to effectively roll back the mistake. This was a loss to the grant of about 400 NBT in fees and BTC volatility.

I am now supporting the NBT/EUR market on Ccedk. We’ve had a total 2543 Euro in sales.

The amendment to my grant is very close to passing. This will cause the terms of the grant to switch to dual-side for 90 days on all markets that I support. It’s about 300 blocks from passing, so I expect this switch to take place later today.

That’s all for now. I will update soon.

jamie

#41

Hi Jmiller,

Thanks for the update. Can you please elaborate on the following? What were the exact amounts lost to fees and volatility in bot-to-bot trades? Thanks!

#42

This is all of the NBT/BTC trade data. Sorry about the formatting. Bter and Ccedk handle their reports a little differently and I don’t have time to make it look pretty right now.

Ccedk NBT/BTC trades
Date/time, order type, NBT total, BTC rate, BTC total
03.10.2014 16:56, Buy, 3 057.47464354 NBT, 0.0027212 BTC, 8.32 BTC
03.10.2014 07:07, Sell, 100.00 NBT, 0.00265807 BTC, 0.265807 BTC
03.10.2014 01:44, Sell, 225.89547967 NBT, 0.00266934 BTC, 0.60299184 BTC
03.10.2014 01:44, Sell, 225.92316816 NBT, 0.00266934 BTC, 0.60306575 BTC
02.10.2014 19:18, Sell, 1 291.77828508 NBT, 0.00265764 BTC, 3.43308164 BTC
02.10.2014 19:18, Sell, 1 291.78691679 NBT, 0.00265764 BTC, 3.43310458 BTC

Bter NBT/BTC trades
Date/time, order type, BTC rate, NBT total, BTC total
2014-10-03 22:55:35, BuyNBT/BTC, 0.00271368 BTC, 13,851.584085 NBT, 37.5888 BTC
2014-10-03 22:55:35, BuyNBT/BTC, 0.00269797 BTC, 569.330100 NBT, 1.5360 BTC
2014-10-03 22:55:35, BuyNBT/BTC, 0.00268332 BTC, 1.276000 NBT, 0.0034 BTC
2014-10-03 22:55:35, BuyNBT/BTC, 0.00264786 BTC, 0.084574 NBT, 0.0002 BTC
2014-10-03 22:55:35, BuyNBT/BTC, 0.00236578 BTC, 118.240141 NBT, 0.2797 BTC
2014-10-03 22:55:34, BuyNBT/BTC, 0.00236577 BTC, 8.335454 NBT, 0.0197 BTC
2014-10-03 01:09:04, SellNBT/BTC, 0.00265757 BTC, 7,042.181369 NBT, 18.7151 BTC
2014-10-03 01:09:04, SellNBT/BTC, 0.00265757 BTC, 7,042.147526 NBT, 18.7150 BTC
2014-10-02 22:01:39, SellNBT/BTC, 0.00267086 BTC, 777.615562 NBT, 2.0769 BTC

jamie

#43

Hi Everyone,

Quick update:

As you are probably aware, the amendment to my grant passed about two and a half weeks ago. I have been operating Nubot in dual side mode on the Bter BTC and Ccedk Euro markets since that time.

The decision has been made, between custodians, that Bter BTC needs additional funds. KTm is getting ready to take over operations on the Ccedk Euro market and I will be moving all of my granted funds from there to Bter BTC. This will result in 100% of my granted funds operating on the Bter BTC market. I expect this transfer to take place within the next couple of hours. You will see a temporary shortage of liquidity in your clients.

jamie

#44

Hi Everyone,

What follows is a quick update on the operation of this grant.

This grant has been operating with 100% of funds on the Bter NBT/BTC market for about the last two months. The terms of the amended grant proposal, which passed on October 7th, were fairly simple: provide dual-side liquidity for 90 days, then switch to sell-side and begin issuing the proceeds as dividends in 50,000 NBT chunks.

Being that this grant is still operating in dual-side mode, there has been little reason for regular reporting. The liquidity offered is available in your Nu clients by opening up the console and entering the following command: getliquidityinfo B

You will see the liquidity that this grant is offering under this address:

B9fv9Di2Y4RxUHzrwjtfq5fetAhqULzWKL

You can also visit Bter.com and view the liquidity walls in the NBT trading section of their website.

The grant has lost some of its value due to fluctuation of the BTC held. It has, however, accumulated quite a few Bter points. These points are being used to purchase BTQ securities, which pay a small weekly dividend in CNY. That CNY is then used to purchase additional BTQ securities. When the time comes to issue dividends to shareholders, these Bter points and BTQ securities will be sold and the proceeds used to purchase additional PPC to include in the last dividend payment. This will help cover the losses that the grant has taken.

The following numbers represent 100% of this grant, as of 12-06-14 18:30 UTC:

Granted Funds: 204,000 NBT
Custodial Fee: 4,000 NBT
Initial Operating Funds: 200,000 NBT

Current Operating Funds
NBT: 146,138.3166
BTC: 117.4652

Bter Rewards
Bter Points: 4,961,770.988338
BTQ Securities: 13,731.667161

Total Funds Estimation: 192,155.19 NBT

The only known bot collisions have been discussed earlier in this thread.

I do not intend to provide any other individual trade data to the public, as the terms of the grant do not require it. However, I will allow one independent audit of the operating account by a trusted member of the community when the grant switches to sell-side and before dividends are issued. This audit will show that the only funds ever withdrawn from the account was a 5 NBT test withdraw.

Some of you may be wondering what the plan is for continued Bter support once the grant changes to sell-side and dividends begin being issued. There are a few options in mind that will be provided in a later post for shareholder discussion.

jamie

3 Likes
#45

Thanks for taking the time to put this together Jamie. Glad to hear that the bot has been (mostly) behaving and that the BTER points etc can be used towards losses incurred due to bitcoin volatility.
Positive news for the future of custodial actions on Bter to my mind.

#46

Thanks Jamie. I am trying to get a handle on the normal loss rate of funds due to uncontrollable re-occuring factors.

Taking 1 BTC = 370 NBT, Current Operating Funds is 189600 NBT, 10400 NBT less than the Initial Operating Funds. If we remove the 400 NBT loss of exchange fees due to wall collision, the loss of custodian funds is 10,000 NBT, about 5% of the initial fund in a course of two months.

Apparently this “tear and ware” cost is proportional to the total turn over of the operation. Do you have figure of total volume going through the bot in this period? With that figure we can come up with a ratio of loss-per-NBT-traded-per-month.

#47

@jmiller @desrever In the NuClient, getliquidityinfo is returning 25395 NBT of buy support for grant B9fv9Di2Y4RxUHzrwjtfq5fetAhqULzWKL, but at the same time, the exchange is showing 9491 NBT of support. See https://bter.com/trade/NBT_BTC. Do you know the reason for this discrepancy?

#48

@mhps I am in much the same situation as @KTm with regard to reporting the specifics of trade data. There are thousands of pages of trade logs and no simple way to parse the data. I plan to use Kiara’s reporting tool as soon as it’s ready to share with all of the custodians. Until then, I’m afraid that I won’t be able to provide you with the data you’ve requested. This is why I offered to allow a community audit of the Bter account being used by this grant, so that shareholders would at least be confident that nothing shady has been going on with the granted funds. Unfortunately, the Bter audit has recently become a more complicated prospect as I will explain below.

@Chronos This is an issue with NuBot 1.4a. I have communicated with @pennybreaker about it and I understand that @desrever and @woolly_sammoth are working on a fix.

All,

Item 1:
Around the 11th of December, there were a lot of rumors floating around about how operators of the Bter exchange had allegedly been involved in a scandal involving the mishandling of funds related to the BitBay project. Up to this point in time, those allegations seem to have been nothing but hearsay. However, as a precaution, it was decided between myself and a few members of the NuBits team that some of the Bter funds being operated by this grant should be moved to other locations. On December 12th, 30004 NBT was moved to other exchanges in four transactions. One test transaction of 2 NBT was sent to a Bitspark. One test transaction of 2 NBT was sent to Poloniex. The Bitspark transaction was then sent to Poloniex to test withdraws from this account. The Poloniex transaction was then sent to Bitspark to test withdraws from that account. After confirming that deposits and withdraws were working on both of the new accounts, a 15000 NBT transaction was sent to each of the new accounts from the primary Bter account. The Bitspark funds have been dual-side operational since that day. The Poloniex funds have been out of operation while we wait for an update to NuBot which will allow for more reliable use of multiple custodians on one exchange. These changes to the distribution of funds in this grant were performed quietly, so as to avoid a panic and possible bank run scenario from the Bter exchange. I hope that everyone can understand that this was done purely as a precaution to protect shareholder funds and reputation of the NuBits name. I personally think that it is very unlikely that there has been any wrongdoing on the part of Bter and I expect to have a healthy relationship with them for a long time to come.

Item 2 (must read!):
The first 90 days of grant operation will be completed on the 6th of January. The proposal states that at this time operation will change to sell-side only and proceeds will begin being prepared for dividend distribution, in chunks of 50000 NBT worth of sales. I have no intention of breaking the terms of this agreement, however, I am very much aware of all the conversation that has been taking place on this forum about how protection of the peg should be top priority over things like dividend distribution. For this reason, I have prepared a motion that will extend the dual-side operation of this grant for another 30 days. I would like to encourage everyone to vote for this motion, immediately. If it has not passed by the 6th, dividend preparation will begin. I don’t feel like there is enough time to include more meaningful changes in this motion but this should buy us some time. Lets start the discussion, now, about how this network really needs the grant to change in order to primarily promote the stability and longevity of the peg and I will create a new motion before the additional 30 days have passed.

I will also post a copy of this motion in the motions thread.

Motion hash: 0A4C19B33EB40845268A942067416AF2CCDC4C93

Begin Motion
Passage of this motion will extend dual-side operation of Proposal to Provide Dual-Side/Sell-Side Liquidity and Shareholder Dividends (amended), Revision 0.1.1, by Jamie Miller, for additional 30 days. All funds will remain available for liquidity operations only. No dividends will be prepared or distributed during this time. This motion includes no other changes to the language of the original custodial proposal.
End Motion

I hope that everyone enjoys the remainder of their holiday weekend!

jamie

5 Likes
Proposal for NBT/BTC dual-side liquidity provider on Exco.in
Today is the 100th day of the Nu network. NuBits has reached second overall in worldwide trading volume for the day!
[PASSED] Motion to extend dual-side operation of grant for additional 30 days
Proposal for NBT/BTC dual-side liquidity provider on Exco.in
#49

jamie, thanks for the explanation and report. CCEDK was hugely frustrating to use before but @ronny has answered forum request and had the export to csv function implemented. The hitory is much easier to use now although not all kinks have been ironed out. I think the custodians are some of the heaviest users of ccedk so it would help everyone if you directly give suggestions of how ccedk could make users life easier.

Thumbs up for taking precations to move funds away from BTer. By the way if the allegation against Bter is real, it has been found out (using txid in posted chat log) that the cold wallet from which Bter paid Bob had more than 6000 BTCs in it.

#50

I appreciate any comments or points to be considered in order to constantly improve the overall user experience on CCEDK. Not all is handled with same speed, it is however all done within an acceptable time, as do improvements every day aming all better as we speak.

2 Likes
#51

What is the current state of the peg? Is it necessary to maintain the liquidity operations? If yes I am in favor of this proposal.