Dear Nu community,
The Nu Lagoon Pool C and Pool D now open for deposit. The annual interest rate of Pool C is 20%. The Pool C and Pool D will begin operation on 28th May as long as both pools’ total asset is greater than zero. Their initial NAV will be set to be same as the NAV of Pool A at 28th May, and their fund will be use to support NBT/BTC market of exchanges Poloniex.com and Bitcoin.co.id.
- Pool C Deposit addresses:
- Pool D Deposit addresses:
Since two months ago, we have successfully created and operated the first Nubits group liquidity pool, the Nu Lagoon pool A, and have proved it works as an effective way to allow really everyone who is able to use a wallet to participate the liquidity operation. When the pool A was created, we also pointed out that in future the Nu Lagoon will consist of multiple pools with different features in risks and returns. Diversified liquidity pools is good and necessary for the health of the Nu system. So we are glad to see the creation of TLLP and encourage others (including ourself) to explore ways to set up the multisig liquidity pools.
Currently, even though the pool’s expected return rate is considerable, we have to admit that there are still many difficulties preventing potential liquidity providers step out. Among those difficulties, we believe the risk exposure to BTC’s price is a significant one. Pool participants are passively exposed to the BTC, which is a highly volatile asset according to historical performance, resulting the custodian fee earned much less attractive. In order to attract more fund to the pool and eventually reduce the cost of liquidity operation, it is very important to design and to create the first liquidity pool without exposure to BTC volatility and to make liquidity provision a predictably profitable business. That is one of the main
goals we put our effort on recently.
Now we are excited to announce the creation of Nu Lagoon pool C and pool D:
Pool C: the first liquidity pool immune to BTC volatility;
Pool D: the first leveraged liquidity pool.
They work like this:
The pool C’s annual interest rate will be fixed before every accounting period. The pool C’s participants lend their fund to the pool D’s participants, and will receive a fixed amount of interest no matter how the BTC price moves in the period. The pool D participants pay the pool C’s interests, be paid with all the custodian fee earned(exclude manage fee), and receive the remaining profit or loss generated by the overall fund of pool C and pool D.
The pool C and pool D will be operated together, the terms of deposit, withdraw and management will exactly same as pool A. The only differences will be NAV calculation and Pool C interest rate adjustment.
NAV calculation of Pool C:
- NAV of pool C = NAV of pool C in previous accounting day * ( 1 + annual interest rate)^(days count / 365)
NAV calculation of Pool D:
Overall total asset = Holding of NBT + Holding of BTC * BTC price
Total asset of pool C = NAV of pool C * outstanding shares of pool C
Total asset of pool D = Overall total asset - Total asset of pool C
Custodian Fee = Custodian Fee in previous accounting day + Overall total Asset in previous accounting day * custodian fee rate * days
Manage Fee = Manage Fee in previous accounting day + Overall total asset in previous accounting day * manage fee rate * days
NAV of pool D = (Total asset of pool D + custodian fee - Manage Fee) / outstanding shares of pool D
Pool C Interest Rate Adjustment:
The pool C’s annual interest rate will be 20% when it begin operation.
When the total asset of pool C is greater than 125% of the total asset of pool D, then pool C’s annual interest rate will decrease by 10%, new rate begin effective at the next accounting day. The minimum of the interest rate is 2%.
When the total asset of pool C is less than 80% of the total asset of pool D, then pool C’s annual interest rate will increase by 10%, new rate begin effective at the next accounting day. The maximum of the interest rate is 100%.
We are looking forward to hearing your questions, suggestions and comments. Thank you.
The Nu Lagoon manage team