LiquidBits term 3 draft
Custodial Address: TBC
Amount Requested: 596 NBT
Custodial grant request to continue to operate LiquidBits.net, a liquidity pool for NuBits.
The independent trust less liquidity pool (TLLP) will provide liquidity on the EUR/NBT, USD/NBT and BTC/NBT markets on both CCEDK.com and Bitcoin.co.id. A target of 10,250 NBT on the bid and ask side of the order books will be provided by the pool split over 4 currency pairs, resulting in a total maximum compensated liquidity of 20,500 NBT. The operation will end after thirty (30) days when a motion or grant to continue operations haven’t passed before.
Liquidity provided by users will be compensated as follows:
with up to 6.6% per month (0.22% per day) on CCEDK’s EUR/NBT pair on both sell and buy side to a maximum of 3,000 NBT ( max pay-out 198 NBT/30 days)
with up to 6% per month (0.20% per day) on CCEDK’s USD/NBT pair on both sell and buy side to a maximum of 10,000 NBT (max pay-out 600 NBT/30 days)
with on average 9% per month (0.30% per day) per month on CCEDK’s BTC/NBT pair to a maximum of 2500 NBT in total but split as follows:
0.35% per day up to 1250 NBT on sell side ( max pay-out 131.25 NBT/30 days)
0.25% per day up to 1250 NBT on buy side ( max pay-out 93.75 NBT/30 days)
with on average 9% per month (0.30% per day) per month on Bitcoin.co.id BTC/NBT pair to a maximum of 5000 NBT in total but split as follows:
0.35% per day up to 2500 NBT on sell side ( max pay-out 262.50 NBT/30 days)
0.25% per day up to 2500 NBT on buy side ( max pay-out 187.50 NBT/30 days)
using the pool’s calculations based on the Dutch auction model to allow a fair distribution of returns amongst liquidity providers. 1473.00 NBT of the requested amount in this grant will be held as reserve to make pay-outs to connected users.
Breakdown grant amount
The current grant has 1237 NBT left as of 26 July UTC with about 15 days to go at a current payout rate of 14 NBT on average. 15 * 14 = 210 NBT. Allowing for a minor increase there will be approx. 1237 - 210 = 1027 NBT left. Total required 1473 + 150 (fee) - 1027 (left) = 596 NBT.
Terms and conditions
Pay-outs take place every 24 hours. The minimum pay-out is 1 NBT. The spread continues to be 2% on either side with 0.0075 tolerance on both exchanges. Operations and pay-outs will start within 3 days after the custodial grant has passed successfully. The pool will continue to operate under the name LiquidBits.net. Remaining funds will be settled with future grants or when the pool is discontinued, burned.
The pool fee is a one-off 150 NBT and serves as a contribution for the effort of supporting the pool, the website, reporting, supporting the users and the monthly costs of operating the server.
Instructions on how to participate in the pool can be found here: http://cybnate.github.io/index-liquidbits.html
Disclaimer and risks
The provisioning of the pool is based on best efforts. No claims can be made by users when the pool server or client software is not available or not working properly.
Liquidity providers remain in full control of their funds throughout the operation of the pool. The pool operator won’t have access to any of the funds hence the reference to trust less liquidity pool. Therefore liquidity providers bear the full risk having their funds on the exchange and won’t be compensated by this pool on an exchange default or inability to withdraw their funds.
Liquidity providers are exposed to the risks of speculators hedging against them on other pairs than USD/NBT like EUR/NBT with the BTC/NBT pairs a particular high risk due to BTC’s high volatility. Therefore the compensation on the riskier pairs is higher.
Finally, please be reminded of the following:
Don’t risk more than you can afford to lose!
----------------------------- END OF PROPOSAL ------------------------------------
Proposed changes term 3 (starts 10-Aug)
- Added NBT/BTC pair on CCEDK (on trial / on request)
- Reduced rates for EUR and USD pair
- Reduced rates on BTC pair
- Increased max liquidity on both USD and EUR pair
- Increased pool fee from 100 to 150 (NuPool’s is 300)
As there are a number of proposed changes, I thought it would be good to have this draft for discussion this week.
I’m also seeing an increase on liquidity provision (>7k) and number of users/addresses (over 10). Not bad for the Summer Holidays on the Northern Hemisphere.
The pool software is stable and with the latest fix the bot on the volatile NBT/BTC behaves as it should. Currently reviewing the memory requirements on the pool server as we had at least one outage because of that.
Looking forward to your feedback on the proposal.