I have limited internet access and I don't have a way to write a proper detailed answer before monday.
A first analysis of this proposal, led to some questions.
First of all I want to fully understand why this changes are needed. I would like to read a detailed and thorough explanation of the scenarios that requires the proposed changes (goal).
My understanding is that these changes only affects NBT-Seconday pegs, correct? The main goal is avoiding possible attacks and speculations which harm the balance of the liquidity provider. A secondary goal is enlarge the liquidity pool and structuring it according to rules of risk reduction.
What is the purpose of having these layers? How will these layers affects shareholders and LPC? Do you envision that the NuClient will eventually display liquidity broke down by tier? If positive answer, do you believe it will be feasible to provide an estimation of liquidity by tier?
In regards to the degree of changes required to the automated trading bot, I am not worried, everything can be done. This solution is particularly engineered and complex, it will honestly require long time to implement and test, especially in the final version where multiple custodian trades on multiple pairs and needs to track and mirror multiple order books at the same time.
So, before thinking about the design, I would like to have a clear picture of why this upgrade is needed. I cannot envision clear scenarios in my head at the moment which makes our current implementation vulnerable and the proposed solution as the optimal way to address it.
All my comments are directed towards Tier1 : in particular I need expert traders' advise on the "mirror order book" solution. Depending on what the goal is, the mirroring part might be un-necessary. Orders books are subject to manipulations and often do not reflect the real status of trading volumes of a market. (Bearwhales, fake sell walls just to create panic, and much more) . So I am not sure why should NuBot mirror it . And what to do in case there are not enough funds to mirror it, and to which extent we should look at (5% range of current price, or all the order book, or a dynamic % window?.
And, how will this mirror strategy impact on the 1USD peg?
If the aim is avoid arbitrageurs taking advantage of the pegged market and short on NBT, I agree that one solution involves limiting the size of our buys and sell walls. Why not just simply put a cap on that, and making this cap dynamically looking at the pegged market volumes?
I realize I probably asked way too many questions. Most of the questions will probably addressed once someone clarifies the goal of these changes.