Current Liquidity

[dysconnect]

Yeah, liquidity tends to be gone in a split second when there’s a sudden dip, which I figure is a bot nibbling on arbitrage opportunities.

In a more ideal world we should let Poloniex walls have high spread and let the traders trade with each other in between, but I don’t like the fact that BTC volatility is translated into NBT volatility on CMC in times like that.

If that can be avoided then it will definitely be good to have high spreads. We’ll need to expand fiat pools, and shift NBT/BTC to off-exchange places where the volatility can’t be gamed so much.

The bigger picture will look like this:

1. Set Poloniex spreads to 2-5%. Or generally large spreads that can still sustain some amount of volume. Perhaps sell-side can be tighter but buy-side to be looser to adjust for ALP expectations.
2. Hopefully this sends more people to NuLagoon Tube (and potentially similar services), which have smaller spreads that can’t be gamed so easily.
3. Implement our own Shapeshift replacement for NuDroid that doesn’t rely on exchanges.
4. Have multiple NuSafe custodians on multiple exchanges, ready to supplement fiat pair ALPs.

[masterOfDisaster]

Set Poloniex spreads to 2-5%

The spread already is at least 2% (each side offset 1%), with parametric order book.

The bigger picture

How does that fit into your bigger picture (which looks good!):

[Discussion] Liquidity operations - a paradigm shift

TL;DR Better face some risk than spend $13k each month for an unreliable liqudity provision scheme /TL;DR Intro In the past days I've spent an enormous amount of time and effort dealing with liquidity operations. Now that the situation has a bit calmed down I thought about improvements. I tried to identify what went good, what not so good and what even bad. Findings Arbitrage doesn't work. The inter exchange arbitrage doesn't work. As long as a pool is below the target, there's just no in…

If you leave out the ALP part, it’s already a subset of it, right?

[JordanLee]

With only 25% of liquidity on the buy side, I am activating as a back up to FLOT operations.

Didn’t @henry create some NuLagoon Tube pairs for FLOT? If so, couldn’t I send BTC to the BTC address and have NBT transferred to FLOT? Are the address pairs documented somewhere?

@zoro and other Poloniex liquidity providers: I can buy NBT for 1.005 with BTC. Just post here or PM me to arrange a trade.

[zoro]

I sent you a pm to buy some BTC.
Although i am afraid that they will vanish even at ALP’s highest spread!

[Nagalim]

I can buy 1000 NBT for $0.999 if anyone wants to sell me them.

[JordanLee]

13 BTC was sent to @masterOfDisaster’s gateway twice for a total of 26 BTC. 12.9038 BTC was exchanged fro 5000 NBT. When all these transactions confirm, the Poloniex walls should be balanced.

As mentioned above, I would still like to get details on FLOT addresses set up on Tube, if anyone has the info.

[masterOfDisaster]

13 BTC was sent to @masterOfDisaster’s gateway twice for a total of 26 BTC

You are aware that they aren’t gateways any more? They are supporting the peg even better.
There are currently 70 BTC buy side support at 1% offset, not being displayed by ALix, but being broadcast:

Sat Jan 23 19:25:33 UTC 2016
status of (former) sell side gateway:
nud getliquidityinfo B | grep BETwD8nSjtj9ADSvej2na34xmsMYwPRymv -A 2
        "BETwD8nSjtj9ADSvej2na34xmsMYwPRymv" : {
            "buy" : 16076.57,
            "sell" : 2103.8263
status of (former) buy side gateway:
nud getliquidityinfo B | grep BFGMPykfKxXZ1otrCZcsbnTwJjKHPP9dsP -A 2
        "BFGMPykfKxXZ1otrCZcsbnTwJjKHPP9dsP" : {
            "buy" : 13423.95,
            "sell" : 6719.3857

If BTC drops, it’s rather for the sell side I fear.
If ALP pull the funds from the sell side like they did from the buy side, the NuBots will only have 10,000 NBT in total.
I hope the offset of 1% helps in that direction as well.

[Ann] Manual Register Service for NuLagoon Tube Address Pair

We will manually register FLOT’s address pair to NuLagoon Tube:

NBT: BqyRzFtWXDmjxrYpyJD42MLE5xc8FrB4jsBTC: 3QDWJ2yqJ5iTUg6cSpAwxx95ba3NG97hzG

[zoro]

There are currently 70 BTC buy side support at 1% offset, not being displayed by ALix, but being broadcast:

In order to make this liquidity visible we are going to need an ALix site showing T1+T2 from the various Nubots. In that way it would be easier for FLOT and operators to check the Nubots’ “secret” liquidity that T1 ALix cannot report.

[masterOfDisaster]

The NuBots did some trades. Resulting balances:

Sun Jan 24 11:57:18 UTC 2016
status of (former) sell side gateway:
nud getliquidityinfo B | grep BETwD8nSjtj9ADSvej2na34xmsMYwPRymv -A 2
        "BETwD8nSjtj9ADSvej2na34xmsMYwPRymv" : {
            "buy" : 13082.98,
            "sell" : 5127.7376
status of (former) buy side gateway:
nud getliquidityinfo B | grep BFGMPykfKxXZ1otrCZcsbnTwJjKHPP9dsP -A 2
        "BFGMPykfKxXZ1otrCZcsbnTwJjKHPP9dsP" : {
            "buy" : 20070.39,
            "sell" : 10187.1611

The peg is still ok:

[masterOfDisaster]

##Water level report

Poloniex ALP with above 0 funds, but low sell side

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T1(.1) overall balanced, but low on Poloniex

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NBT charts from CMC

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BTCUSD from Bitfinex

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Summary

Do you recognize how smooth liquidity provision has become?
The recent daily trading volume was still tens of thousands of USD daily, of which over 80% was on Poloniex.
The ALP was rarely zero, but some thousand USD value were still traded by the NuBots.

Now you might to glimpse how hard I had to fight to keep the peg - with almost no ALP support and a trading volume of up to $200,000 daily.
Back then we already had NuBots with market aware offsets, albeit in a manual way.

With CRFC to create T1.1 and NuBots on T1.2 and T2 the peg is safer than it is without it.
Market aware dynamic offsets might make that even more effective and at the same time cheaper.
It already works with static offset and some ALP (I haven’t touched the config of the NuBots for 2 days now).

Or do you remember the last emergency call to FLOT to deposit funds at the NuBot accounts?

Outlook

Please read and discuss this

[Discussion] Liquidity operations - a paradigm shift

TL;DR Better face some risk than spend $13k each month for an unreliable liqudity provision scheme /TL;DR Intro In the past days I've spent an enormous amount of time and effort dealing with liquidity operations. Now that the situation has a bit calmed down I thought about improvements. I tried to identify what went good, what not so good and what even bad. Findings Arbitrage doesn't work. The inter exchange arbitrage doesn't work. As long as a pool is below the target, there's just no in…

Parts of it might be more controversial than others.
The part that deals with providing liquidity with a combination of ALP on T1.1 and NuBots on T1.2/T2 might be able to find consensus.

[woolly_sammoth]

@masterOfDisaster. Thank you so much for your hard work over this last tumultuous period. Sorry for not being able to give the support that was needed, when it was needed.
I’m trying to catch up with everything that has happened but I can see that there is a definite need for a change in how liquidity is provided. I really do hope that the updates that are coming live up to the expectation and the need.
A lot of the topics that have been touched on by you and others are known. Trader pressure on the peg is real and is something that the Parametric order books of NuBot were specifically designed to combat (traders can still use NBT to trade, they just may have to pay a premium if they want to trade ‘Now’). By forcing the use of NuBot with the New ALP software I hope that approach to liquidity management will become more common.
You mention that the peg is safer with CRFC and NuBots than without. The good news on that is that the CRFC code is ready in ALPv2 and we are very close to a release of the NuBot code that contains the new ALP client. I’m sorry it hasn’t been ready before now as it may have lessened your load over the last few days, but it is nearly ready now. I just hope it lives up to expectations.

[crypto_coiner]

The good news on that is that the CRFC code is ready in ALPv2 and we are very close to a release of the NuBot code that contains the new ALP client

Looking forward to it.

[masterOfDisaster]

Bittrex buy side is low/empty.
I’m not in the position to change that
The trade volume there is 33% of total daily volume with roughly $10k.

Is there still consensus that sustaining dual side operations at all exchanges is a good idea?
Why not selling stamps anywhere, but buying them back only at specified places for guaranteed prices (maybe post offices), if you understand what I mean

And for the record: it wasn’t me (the one who traded at Bittrex)!

Update

Bittrex still with almost no buy side

Nu is lucky that traders don’t fill more expensive orders. There’s almost nothing (~1 BTC) in between the current rate and $500 per BTC in the NBT/BTC pair there:

[masterOfDisaster]

Thank you so much for your hard work over this last tumultuous period. Sorry for not being able to give the support that was needed, when it was needed.

My complaints were rather directed towards NSR holders, who don’t contribute to the success of this endeavour and not towards those who already do so much.
I appreciate that you care!

I really do hope that the updates that are coming live up to the expectation and the need.

I hope so, too. If they don’t we’ll analyze and refine

Trader pressure on the peg is real and is something that the Parametric order books of NuBot were specifically designed to combat (traders can still use NBT to trade, they just may have to pay a premium if they want to trade ‘Now’)

Except for the overall market situation (BTC price, 1st derivative), the actually traded volume might be taken into consideration for adjusting the offset - once market awareness is being implemented.

You mention that the peg is safer with CRFC and NuBots than without.

This is according to my current assessment of the situation based on the recent events.
CRFC can be a great line of defense on T1.1
NuBots can be a great line of defense on T1.2 and T2.
We’ve learned that NuBots alone can be sufficient. Do you perchance have the payout data for NuPool participants at Poloniex from 2016-01-15 to 2016-01-24 (total rewards per minute would be enough to derive the liquidity per minuted from it)?
I expect using a combination of CRFC ALP and NuBots to be cheaper, while being more efficient. Than one of them alone.

I’m sorry it hasn’t been ready before now as it may have lessened your load over the last few days, but it is nearly ready now.

CRFC provides better incentives to put funds on T1.1 than the current scheme does. It should work. We’ll see.
The FC test run by @Nagalim on Bter look promising.

Besides I wouldn’t have known how valuable CRFC can be for such a situation, if I hadn’t learned it the (almost too) hard way.
Let’s learn from that together and improve the scheme together!

[cryptog]

Bittrex still with almost no buy side

Maybe this is an indication that demand for NuBits at Bittrex is increasing, in which case we should keep supporting liquidity at this exchange?[quote=“masterOfDisaster, post:1256, topic:1239”]
We’ve learned that NuBots alone can be sufficient.
[/quote]
I am wondering what is the major difference between nubot and alp? Is that ALP does not put proceeds from one side to the other (besides the parametric aspect) ?

[Nagalim]

Nubot will support ALP soon. The difference between ALP and MLP is whether there is a conversation between server and client or not.

[masterOfDisaster]

an indication that demand for NuBits at Bittrex is increasing,

On the contrary, there are no BTC on the order book. Look at ALix or the pictures.
People dumped until the BTC were gone.
If they continue, the peg at Bittrex is lost.

[cryptog]

whether there is a conversation between server and client or not.

Can you clarify a bit?[quote=“masterOfDisaster, post:1259, topic:1239”]
On the contrary, there are no BTC on the order book.
[/quote]
Oops. You are totally right. I have just got up from bed…

[Nagalim]

ALP is a conversation between the client with access to the private key used to place orders and a server that verifies the orders using a public key. MLP does not require the verification step and so is simpler, leaving just the client layer.

In theory, there is no reason at all to use ALP with 0% reward as opposed to using NuBot as an MLP.

As for bittrex, if anyone wants to sell me nbt for $0.999 id be happy to trade them some btc. This would of course be a great deal if nupool were running FC or CRFC. Currently, there is no motivation for a bittrex LP to trade with me to rebalance, so they won’t. There’s just no reward for balancing an under-target pool in the fixed reward model.

[masterOfDisaster]

There’s just no reward for balancing an under-target pool in the fixed reward model.

That comes on top of having no incentive to try earning 0.24% per day in turbulent times, when you can easily lose 10% in hours if hedgers use your funds successfully…