FLOT BTC Operations (buy side)

[jooize]

Current Liquidity

buy side in polo is very thin. FLOT can PM me to arrange a transaction to fix that

https://alix.coinerella.com/walls/

Have I understood it correctly that we would send BTC to @zoro (for NBT?) and they would inject it to the 6519 NBT worth of BTC currently on the buy side at Poloniex?

In which case how much?

[dysconnect]

It’s not very well agreed upon yet. One can propose a transaction but it might not receive enough signatures.

[masterOfDisaster]

Have I understood it correctly that we would send BTC to @zoro (for NBT?) and they would inject it to the 6519 NBT worth of BTC currently on the buy side at Poloniex?

I understand from @zoro’s post that he/she is willing to trade NBT for BTC to put the BTC on T1.

In which case how much?

And this is where it gets tricky. There is no reliable historical information that I’m aware of and attempts to create a rule set for how many funds to trade in which case to achieve what goal have failed.
It seems that all relies on the discretion of the FLOT.
I don’t feel comfortable with T4 being the only layer that is able to trade NBT for BTC or vice versa (except for @JordanLee, but that only if the FLOT fails.), especially because FLOT only has one multisig address that requires 6 of 8 to execute transactions.
We must find ways to involve T3 in this process.
ALiX reports only T1 liquidity. The volume of T2+T3 (sell side) needs to be calculated by subtracting T1 from the total amount of circulating NBT.
As long as T1 is unbalanced and lacking BTC or NBT, but T2 and T3 still have sufficient BTC or NBT left, involving FLOT is the wrong measure.
T1 needs to be balanced with funds from T2 and T3.
Only if constant demand for funds from T2 and T3 that brings the overall liquidity of T1-3 out of balance, FLOT gets involved to fill the low side (T3) with funds from T4.
At the moment T2 and T3 are more or less decoupled from T1. That’s the reason for this thread:

T3 custodians

When a pool gets hit by a large buy or sell, it can lose the peg locally. This is especially true on pegs with a smaller amount of liquidity. A custodian acting in a Tier 3 capacity may be able to help in such a situation. The T3 custodian has several questions to satisfy, as any tier must: 1. How to hold and report liquidity reserves 2. How to interact with higher tiers 3. How to interact with lower tiers 4. How the custodians are compensated 1 can be a single signature address. 2 is …

The gateways I created to inject NBT or BTC into Poloniex T1 might send the wrong signal. This is not what the FLOT is designed to do - to interact with T1. I tried to explain it over and over: these gateways are for emergencies only and might save the peg if all else failed.
Even with a more agile FLOT subset that has 2 or 3 of 8 multisig addresses with only parts of the funds the FLOT is never agile enough to balance T1!
And to be honest: if that’s how the work of FLOT is interpreted by NSR holders, some of the FLOT members might rather sooner than later quit and some NSR holders might be dissatisfied with the performance of FLOT.

Please tell me what you think - I think it’s necessary to make NSR holders aware that the tiered liquidity model needs to be used to balance buy and sell side and that the FLOT is only used to balance uneven T1-T3 sides, ideally making deals with T3.

[mhps]

At the moment T2 and T3 are more or less decoupled from T1.

Not totally. [Passed] Motion to regulate rules of fund management in NuLagoon requires auto rebalancing t1-3 for Nulagoon (@henry how much T1 buy side on poloniex is from NuLagoon). We only need to implement a similar way for ALPs. (The thread leading to the motion is alsoa good read)

[masterOfDisaster]

Not totally. […] auto rebalancing t1-3 for Nulagoon

You are right.
And it will get better with fixed compensation scheme.

The thing is: T3 buy side has potentially millions of BTC. Every BTC owner can move funds to a T1 operation. With ALP it requires not much to do that.

So the compensation of T1 buy side should be enough to have sufficient funds there, to incentivize people for putting up orders. At the moment the compensation scheme doesn’t favour putting funds on buy side if the buy side is low.
I think we should wait for the fixed compensation scheme to be widely supported, before we try to find solutions for a problem that I expect to be much less urgent with a different compensation model.
If fixed compensation works like expected, his doesn’t require involvement of any of the higher layers.

The sell side is something that needs more attention. The amount of NBT in circulation is limited and the USD value of NBT in circulation way below the USD vlaue of BTC in circulation.
But that rather belongs in the sell side FLOT thread or in fact even better in the T3 custodian thread

[dysconnect]

I propose to sell to @zoro 15.8 BTC at a price of 0.00264722 BTC per NBT, which matches the lowest sell side order on Poloniex at the time of writing. The total sale proceeds will be 5968.53 NBT, rounded to 2 decimal places.

(Suppressed until some technical issues are dealt with)

[Nagalim]

Can you do the @zoro sale and the NSRbuyback txn in the same txn?

[cryptog]

ke Keepass for Android or iOS), you can sign transactions from your mobile phone!

Will give this a try. Tks for the pointer and explanation.

[jooize]

Current Liquidity

4005 NBT has been purchased with 10.2 BTC.

Current Liquidity

Once again Polo’s buy side has problem. i have sent a pm to Jordan to do something about it ASAP We need to introduce a pay scheme in Poloniex to pay ALPs depending on the liquidity.I guess a “special” fixed cost scheme?

FLOT should still do this, right?

I propose to sell to @zoro 15.8 BTC at a price of 0.00264722 BTC per NBT, which matches the lowest sell side order on Poloniex at the time of writing. The total sale proceeds will be 5968.53 NBT, rounded to 2 decimal places.

Note: Jordan took care of that transaction.

I don’t know how to calculate that yet. Do you first look at the walls, and then…? If I’m to do this later I’ll need help learning how.

[dysconnect]

We’ll sell NBT for about 1.003 to @zoro. 1.007 is the standard sell-side price based on the spread regulations. The 0.004 difference pays for volatility risk - about the same rate as Tier 1 interests, for the 36-48 hours of signing time. When @zoro indicates how many BTC he can buy, FLOT should prepare an unsigned transaction and calculate an NBT amount for @zoro to deposit. When FLOT confirms the deposit we should proceed to signing the transaction.

[zoro]

I have sent a pm to Jordan to perform an agreement. The 36-48 time frame is not convinient at all.
The liquidity situation could have been changed from the time i sent the NBT until i get the BTC. If we can have a time frame below 2 hours then i am ok to proceed.
It is much more convinient for NU and FLOT to use the sell/buy gateways of MoD but again the time frame is very very bad for this kind of operations!

[Nagalim]

We’ll sell NBT for about 1.003

This is exactly the spread I suggest for T3 operations. Just give @zoro some credit and let him be his own T3 custodian at that spread. If he puts up collateral, even better, but we should be extending at least 2 kNBT buy and sell side to him. That would give a time of response that is literally as fast as he can sign his own Txn and get it through the blockchain of volume up to his credit. Then, T4 can take their sweet time (48 hours or whatever) to refill it.

[dysconnect]

If you intend to just send the funds back to T1 the delay shouldn’t be a big problem - we still effectively pay you interest for the delay. Or put it another way, is there a price point at least 1.000 that you could accept for up to 36 hours of delay?

@nagalim I guess somewhere deep in my subconscious I adjusted the figures to fit yours, because 1.003 doesn’t match my arguments very exactly. NuPool’s rates are 0.24% per day so for 36 hours of delay there should be a 0.36% offset from the sell-side price. For 48 hours, the offset should be 0.48%. We may want to adjust for the lack of exchange default risk in the process, but on the other side of the coin we also need to consider the opportunity cost of the trader. The bottom line of the above considerations is that the offset (T1 sell side price minus T4 sale price) for a T1 LP on Polo should be less than 0.48%.

[woodstockmerkle]

We can anticipate further needs to fund the NSR buybacks, and risk is lessening in the FLOT operations and the processes + toolkits.

For the FLOT members, can we adjust the consensus for FLOT to be responsible for 33% of the Nu BTC and request JordanLee transfer an additional amount to the MultiSig address?

Coinbase - Buy/Sell Digital Currency

[Dhume]

I see no reason not to support this.

[mhps]

Do we not have enough fund?

I’d like to see all problems (signature order, insufficient fee) solved with a smooth end-to-end demo.

[ttutdxh]

Because half (4) of FLOT members have requested 15% or more, 15% will be transferred. Tier 4 buy side funds consist of 722.1 BTC at the moment, so 108.3 BTC will be sent to 3QDWJ2yqJ5iTUg6cSpAwxx95ba3NG97hzG. I will transfer funds before the end of today UTC.

Right now we only have 28.50005 BTC in FLOT BTC address, because of weekly buyback payments. That amount will not likely be enough for even the next week buyback.

I propose this time FLOT BTC address is refilled win 20% of T4 funds, that will amount ~120 BTC to continue with the process of transition to FLOT.

FLOT members agree? Individual transfer amount propositions?

[woodstockmerkle]

I concur with the 20%.

Edit: My upper threshold remains 33%

[Dhume]

I already agreed to transfer up to 33% of T4 BTC to FLOT.

[jooize]

I propose this time FLOT BTC address is refilled win 20% of T4 funds, that will amount ~120 BTC to continue with the process of transition to FLOT.

Agreed.