Bot for providing liquidity`


#1

Hello,

is this https://bitbucket.org/JordanLeePeershares/nubottrading the bot you use for automated trading? I mean liquidity providing?

When i use that software with standard setting, will i have the same results these pools will have there? https://nubits.com/liquidity-pools

If not, how would i optimize it?

How can i raise profit on poloniex? And will i risk losing value when my
nubits are exchanged to btc while btc goes down? I mean when i hold btc
and btc goes down at a day 13% then the monthly profit from nbt would
be lost already isnt it? Can this be avoided?


#2

Hello and welcome to the forums!
I understand you want to provide liquidity. Instead of going deep into the details of that - the bot you found is indeed used for providing liquidity, but using that is somewhat more complicated than what I’m going to propose - allow me to point you to a quite convenient way to provide liquidity - configuring that is even more easy than mining in a pool :wink:

Have a look here: https://nubits.com/liquidity-pools
NuPond, NuPool and LiquidBits are the so-called TLLP (trustless liquidity pools). Have a look at their website for how to use them.
NuLagoon is a different animal and “Pool C” might be just what you are looking for if you are concerned about BTC volatility when providing liquidity.
If you have more questions (I bet you do, because this is only a pointer into the right direction :wink: ) feel free to ask!


#3

The way is to become an LPC and get paid by Nu shareholders to compensate for the exchange rate risk you take. You would need propose a custodian grand for shareholders to vote.
If this is to complicated you can do as MoD suggested to join a pool.
The nbt/usd pair has no exchange rate risk.


#4

Yes. If this risk is too much for you, we have 3 pools without that risk:

Liquidbits on CCEDK. NBT/USD and NBT/EUR pairs.

NuPond on Bter. NBT/CNY pair.

NuLagoon pool C. Pool c is reserved as a riskless pool and will only lose money if the exchange defaults. However, NuLagoon is not ‘trustless’ like NuPond and Liquidbits are.


#5

Thanks for the answers. Are bter and ccedk established exchanges you would trust with your money? I mean providing liquidity would mean risking my money on that exchange at least.

Is it better to spread your money through 4 pools in order to gain more? For example Liquidbits on CCEDK. NBT/USD and NBT/EUR pairs.
+
NuPond on Bter. NBT/CNY pair.
+
NuLagoon pool C. Pool c
Or better chose only the one with the biggest reward?


#6

NuLagoon has a minimum deposit.

CCEDK owes Nu money, but has been responsive and most people are probably closer to trusting them at this point.

Bter owes a lot of people money: they had an exchange hack and have promised to pay everyone back, but haven’t made that many moves in that direction. That said, I have a good bit of my money on there personally and don’t expect a repeat of the February hacking.

Every liquidity operation currently has exchange default risk. That is why we are making B&C for a decentralized exchange that won’t default.


#7

Diversification is rarely a bad idea.
Spreading the money over 4 pools means more initial configuration effort.
But once the configuration is done, it’s no difference between running one or 4 pool bots.

Both ccedk and bter had trouble in February this year. They are still here. It depends on how you see it whether you think you can trust them with your money. I have bots running at both of them. :wink:
As long as we depend on centralized exchanges there’s always the risk of exchange default.


#8

Am i seeing it right that the profits for the currency pairs are relatively the same on all pools?

Monthly
BTC 7.2-13%
Fiat 1.5-4.5%

And the trustless pools, all except one, need you to run a bot on your computer, which means you cant provide liquidity when your computer isnt running. Can it be hosted on a webspace?

Though when seeing the numbers then btc is too risky because hedging and fiat is relatively low, except NuPond CNY, which is something like 50% annual return. Except that would be the maximum and not the real return.

So when wanting to go the safe fiat route then you risk your money on the exchange and the exchange only needs to be hacked once in 2 years and your complete money is gone even when you withdrew all profits.

I have to think about if the risk is worth it. And when it only works with a running computer then the profit would be way less on top or power costs would have to be added.


#11

Good analysis. Exchange default risk is certainly real, and we are working on it with B&C. The real profit comes when you are already making those risks. For example, my computer is already running all the time to mint NSR, PPC and BKS, so this isn’t extra electricity for me. Also, I day trade on bter, so I’m already making those risks. I just leave my funds in the pools in between daytrades.

If you want, you can run your tllp not on a digital ocean server and pay $10/month and have all the electricity and internet fees taken care of.


#12

Yes, the rewards are more or less the same depending mainly on the trading pair.

All trustless pools require a bot to run.
NuLagoon has active pool management, but requires trust in the used exchanges not to default and trust in NuLagoon itself.
I’ve tried NuLagoon and it worked flawless. You have to take into consideration that the “accounting day” (once each week, I think on Thursdays) is the only day deposits and withdrawals are processed.
Using a trustless pool keeps your funds under your control (and for sure under the exchange’s control :wink: )

I don’t know how hosting on a webspace should work.You need to run python scripts that communicate with exchanges.
A small virtual server would be possible, but I wouldn’t dare to trust a virtual server with exchange API keys.

If you have a RaspberryPi or a similar low energy device that is a perfect match for running tllp bots continually with almost no power costs (1.5 kWh per month).


#14

That is why liquidity provision is well paid right now, I believe.
Diversification over several exchanges is also recommended although we saw back in feb several exchanges being hacked within 1 week.
Ultimately, B&C will bring what we need: a very secure exchange where hacking is impossible… But then the rewards would be drastically decreased :smile: .