Current volume

[nmei]

I believe in ‘high rate - low target’ for crypto pools and ‘low rate - high target’ for fiat pools. Unfortunately, I have not been getting good results from this setup on bter. My btc pool has much higher participation than my cny pool despite being at target all the time. In fact, I’m almost totally convinced I need to drop the target and raise the rate on the cny pool.

Hey, just give me some time…I’m moving stuff to the CNY/NBT pair…

[crypto_coiner]

It’s very expensive for Nu to provide traders with this feature. I hope NBT get used for payments soon as only being a hedging instrument will bleed Nu out over time.

Supporting non-NBT/USD needs to be phased out rather sooner than later in my opinion.People who want to hedge BTC volatility with NBT need to make use of BTC/USD. That saves liquidity providers from the BTC volatility risk and is a little less convenient for traders.But it can save Nu a lot of money and keep the liquidity on a more reliable level.What would Nu do if TLLP liquidity providers decided to stop because of the risk?How could the peg be kept?Solely by NuLagoon (which is by design less responsive to people’s desire to stop liquidity providing)?

Why not testing the waters with only supporting NBT/USD on popular exchanges or even those who before limiting it to NBT/USD had frequently used NBT/BTC pairs?

The peg needs to be kept in the NBT/USD pair - on centralized exchanges which will be fiat gateways for Nu.As far as I remember NBT is pegged to the USD and not the BTC value equivalent of 1 USD.

I second fully the 3 quotes above from @masterOfDisaster
The original commercial manifesto (video) of NuBits was for NBT to be a synthetic dollar, that people could use to pay for goods and services, not for traders to hedge their crypto bets

This liquidity will be irresistable to traders.

I dont understand this.

Talk of phasing this out in favor of our non-existent USD market
is presumptive at best. Where is the demand for USD/NBT going to come
from? No one is saying because no one knows. What we do know is
the market has rewarded us for liquidity provision. Therefore, I argue
for doing more of what has made us successful, not less."

How is it compatible with https://www.youtube.com/watch?v=D_imtRPCKCg

[cryptog]

Tks for reminding me of the exact statement made by Jordan Lee.

I think I understand now better his vision.

It appears that right now it is not possible to create a decentralized crypto-currrency (pegged) by using exchanges that deal with FIAT because those exchanges are by nature centralized. They can shut down the NBT/USD pair at any time if they want to. Of course spreading the pair over different FIAT exchanges would decentralize a bit the operations but we have seen back in Feb this year that even non FIAT exchanges could be hacked at the same time, leaving NuBits with no place to be traded suddenly and therefore endangering its life.
Maybe in the future, someone would be able to come up with a decentralized exchange that can deal with FIAT pairs directly but to me it sounds oxymoronic and right now it is certainly not possible.
However the creation of a decentralized exchange that deals with non FIAT pairs seems feasible and this is what BCExchange aims at.
The problem with BCExchange is that it cannot deal with FIAT pairs.
Therefore liquidity providers are subject to bitcoin’s volatility.
But is this really an issue?
After further thoughts, I would say that the answer is no.
Besides increasing the spread (this has to be tried but it seems that the chance that it would become the major way to compensate for dealing with volatility is rather low), It seems that one possible major direction would be to increase the liquidity provision rewards if providers think that the current pool monthly interests are insufficient for dealing with bitcoin’s volatility.
This could be counterbalanced by 2 elements, from a Nu’s P&L perspective.

• Since exchange default is non existent at BCExchange, Nu could still increase the rewards to deal with volatility while at the same time offering lower fees than current centralized exchanges
• Assuming that demand for NuBits will grow steadily and significantly over the coming months and years, Nu would be able to have significant revenues, that are higher than its expenses (that include liquidity provision costs) by an order of magnitude.

Overall, my point is that assuming that there is a strong demand for NuBits, rewarding generously liquidity provision would not be a problem. Therefore, Nu could for a while (maybe a long time) only have a NuBits liquidity provided mostly over non FIAT pairs.

[Sentinelrv]

I think some type of automated hedging built into NuBot would help with the volatility risk too. Not sure if that’s possible though. Maybe @desrever would know. People aren’t hedging because they see it as complicated. If it were made easier or even automated, then that would really help us out I think.

[cryptog]

This has been touched upon in the past but it looks too cumbersome.

[Sentinelrv]

I see this listed in the NuBot Development Roadmap. Wasn’t this what they were talking about before here?

• 0.5.1 :

◦Futures markets integration

[cryptog]

◦Futures markets integration

Interesting. I have not noticed it until now. Not sure if it deals with something similar as what is talked about here. I was talking about this post.

But in the roadmap, what I think is going to contribute directly to the reduction of bitcoin’s volatility exposure is

• Parametric liquidity distribution models (configurable)

• Market-aware liquidity distribution models ( adaptive )
  because those features would limit the amount of NuBits that traders would have access to for protecting themselves from volatility, in my understanding.

[nmei]

Ok perhaps I’m missing something, but why could BCE not integrate fiat pairs…
If we can develop the USD ecurrency integration:

Enable easy selling/buying Nubits with e-currency USD

Here I try to make a centralized and coherent post to stimulate discussion on how to make it easy to sell and buy Nubits with e-currencies. Hopefully we can draw up a strategy, formulate a plan, and come up with proposals for relevant motions or custodian votes. tldr; here is a summary It's important for Nu to make selling/buying Nubits by e-currencies issued by payment processors and gateways. There are three ways to accomplish it: * official installation of Nubits to the processors wit…

There should be a way to hook this into BCE for those who are willing to be market makers for fiat.
I know all of this is nebulous code right now. But it should be possible? Not immediately, but eventually…

[mhps]

There should be a way to hook this into BCE

There must be a way to store fiat currency in multisig addresses so signers can control the release of the fund, in order for BCE to work.

The signers, like in any escrow, has to keep the fiat fund before releasing, not just the payment token (e.g. Perfect Money e-Voucher numbers), to prevent double spending.

I guess using APIs of fiat e-wallets (e.g. Perfect Money ) it could be done.

Interesting thougts.

[JordanLee]

B&C Exchange could be used to trade with funds held off supported blockchains, such as bank wires or cash. It would just utilize the escrow features mentioned in the design paper that are expected to be developed after the initial functional release.

[desrever]

I think some type of automated hedging built into NuBot would help with the volatility risk too. Not sure if that’s possible though. Maybe @desrever would know

What do you mean by “automated hedging” ?

I see this listed in the NuBot Development Roadmap.

Futures markets integration

Wasn’t this what they were talking about before here?

Yes, the link you provided is correctly pointed

[Sentinelrv]

What do you mean by “automated hedging” ?

I’m not a trader, so this isn’t really my area, but what Pennybreaker said in that thread seemed to make sense to me. Rather than expecting people to hedge with these futures contracts themselves, couldn’t we automate it so that liquidity providers don’t even need to worry about it? They would break even as Pennybreaker suggested, but they would still collect the full interest from the pool. Nobody seems to be doing this though, maybe because it seems too complicated. Here is what Pennybreaker said about making it easier by automating it…

“If this could be scripted or incorporated into NuBot so that contracts could be added and subtracted (through Okcoin api) as soon as custodian BTC holdings changed, we could effectively stop or drastically reduce the losses taken by exposure to NBT/BTC pairs. This would not require any special trading knowledge or market prediction. It would simply require that the bot know how much BTC is held and how much risk the leveraged account could take to avoid margin calls.”

Would this be possible to do so that liquidity providers are no longer exposed to volatility? Maybe it could be made optional for those who still wanted to take the risk.

[crypto_coiner]

B&C Exchange could be used to trade with funds held off supported blockchains, such as bank wires or cash.

That suggests BCEx can integrate fiat, bank account and manh other money services in itself thanks to the escrow.

[cryptog]

How long do you see Nu’s liquidity being dependent on NBT/BTC over the coming months and years?
In other words, what is your view on the part of liquidity provided by NBT/BTC over the total liquidity (cryptos pairs and FIAT pairs)
Right now, liquidity depends on bitcoin FIAT exchanges that price BTC against the dollar, which enables Nu to price NBT against the dollar, but do you expect that we would see NBT FIAT exchanges (Ex: Coinbase sells NuBits) soon or not?

[desrever]

Perfect, I just wanted to make sure we were talking about the same thing. Terminology can be ambiguous, we should find better vocabulary : Bot operators should “hedge” as in protect themselves from BTC drops , because traders uses NuBits as a “hedge” to exit Bitcoin when they fear drops.

[Sentinelrv]

Is this what futures market integration means on the NuBot roadmap? Still not clear on that. Just wondering whether something like this was already planned.

[desrever]

Yes, that is down along the roadmap

[tomjoad]

Up to $84,938 in trading volume for the past 24 hours, with eight different exchanges showing NBT volume.

[cryptog]

9th 95,858 usd

[cryptog]

$ 103,014