In Jordan’s recent draft motion to end LPC operations of KTm and Jamie, he again brought attention to the Nu network’s critical need for additional Liquidity Provider Custodians (LPCs). If the motion is passed, all shareholder-funded liquidity managed by @KTm and @jmiller will come to an end.
As myself and @Creon have pointed out, all existing LPCs should seriously be considering offering group funds. The potential exists to earn above-average returns relative to the personal NBT risked, simply for administering a pool. The ideal state of liquidity pool management would be an automated system similar to mining pools, but I see no reason why manual liquidity pools should not be created in the meantime.
I would like to suggest that either @KTm or @jmiller (or both) create their own private LPC funds that will activate immediately upon the elimination of shareholder support. Perhaps they could have a name like mutual funds do. I’ll call the hypothetical fund the “First Nu Pool” (FNP).
KTm or Jamie would solicit liquidity funds from community users in exchange for a group management fee. I expect there are many others like myself who would be eager to provide a couple thousand NBT in liquidity to claim the current high fee rewards, but are unwilling or unable to properly operate NuBot. To preserve the fund manager’s time, a minimum threshold for user participation (perhaps 100, 500, or 1000 NBT) would be required to eliminate administrative overhead. For each 30-day period of operation, new participants in the pool could be solicited for the following grant period.
Feb 15 - 22: Solicitation for FNP by KTm or Jamie through BitMessage. 10 users sign up.
Feb 22 - 28: Finalization of custodial grant proposal
Mar 1 - 7: Voting and successful passage of Period 1 grant.
Mar 8 - Apr 8: First month of FNP operations. At conclusion of operations, all 10 users plus the manager divide up the fee.
- Mar 8 - Mar 31: New users message FNP manager to join for following period. 15 additional users decide to join.
- Apr 1 - 8: Voting and successful passage of Period 2 grant.
Apr 9 - May 9: Second month of FNP operations. At conclusion of operations, all 25 users plus the manager divide up the fee.
Group Liquidity Provided: 55,000 NBT (5,000 NBT from 10 users, and 5,000 NBT from manager)
User Fees: 5,500 NBT. 550 NBT per user and manager.
FNP Management fee: 1,000 NBT solely to manager.
TOTAL Fees: 6,500 NBT
The advantages to this approach are considerable. @KTm or @jmiller would earn a much higher percentage fee than what they have been earning so far, for marginally more administration work. Ordinary community members would be able to access the reward fees available for providing liquidity. The Nu network will be stronger as a result. All that is required is additional manual work by the FNP manager to keep track of who has contributed to the fund. Perhaps a custodial grant request could be made in the future to automate and anonymize participation.