Right you are talking about the liquidity provision rewards. At the beginning, I thought parking rates.
Why do you think that they cashed out? I am curious because this is also my assumption but I do not know for sure although it is likely since they have expenses to recoup.
But if they did cash out and assuming also that the contractors have cashed out, the buy side liquidity should be decreased by 20k if the expenses bleeding pace is the same as last month.
See below:
However, this is does not take into account the new arrival of buy side liquidity brought by new custodian’s money.
Right now the liquidity is: {“blocks”:576497,“buy”:99419.3192,“sell”:99569.9931}
Pretty much the same on both sides.
I do believe that fresh buy side liquidity is counterbalancing the cashing out.
However, custodians provide liquidity the same way to both sides, buy and sell side.
So new liquidity should not be able tofill the gap. (it should keep the difference created by the cashing out).
From there, we can infer that there is more liquidity being brought to the buy side liquidity.
In that situation, this is because the sell side would be overcrowded (too much competition which causes the rewards to be too low) and custodians are attracted to the buy side which offers more rewards.
But this works only in a fixed costs ALP scheme.
From what I understand, there is only one pool (NuPond on NBT/BTC) that adopts that scheme.
So its effect should be negligible on the overall liquidity.
So probably there is more demand for NuBits right now because traders are wary about the decrease of bitcoin after its recent rise, which would be behind a natural market force filling the gap, taking nubits from the sell side to the buy side?
