FLOT BTC Operations (buy side)

[masterOfDisaster]

Agreed:
@masterOfDisaster
@jooize
@mhps
@cryptog
This is is a wiki entry. It could be updated once more FLOT members replied to keep an overview.

[jooize]

Agreed.

[masterOfDisaster]

Sry, @jooize, I undermined your last attempt to edit the wiki entry…

[mhps]

I just realized NuSafe is emptied. I though emptying half would be a first time.

[cryptog]

Agreed.

[Dhume]

With myself added that is 5 out of 8 in favor of the withdrawal.

However I’ve made a very dumb mistake, I had a small amount of funds on polo to test the Tether USD with. In a brain freeze this afternoon I thought it would be easier to have the funds in 1 place when I send them so I send all the funds to Polo. However I forgot there is a withdrawal limit on Polo…So I’ve just send 50 BTC (roughly 25k USD) to the FLOT multisig and opened a support ticket to see if I can increase the withdrawal limit so i can send the remaining 10,196 BTC tonight. However if that doesn’t work I’ll have to wait 24 hours to send the rest. My apologies that was a stupid mistake on my side.

tx for 50 BTC: 9ce2d98faa27fd576f4e6842fbf7e72a093da5544126a24f14d70130f6f0f72b

[Dhume]

I suggest we send 30 BTC to the tube in a first effort to get some buy side going again.

Verified and signed:

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

Ping: @cryptog, @dysconnect, @masterOfDisaster, @jooize, @mhps, @ttutdxh, @woodstockmerkle

[Dhume]

I just realized NuSafe is emptied. I though emptying half would be a first time.

I wish we could just empty half of NuSafe as this seems a terrible price to buy BTC at such high prices however seeing as we have almost no buy side funds left I feel withdrawing the full 30k USD is warranted, also a majority of FLOT and other shareholders have called for withdrawing the full amount.

[cryptog]

Verified, signed 2 of 5-8.

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

[ttutdxh]

Signed 3 of 5/8

[Nagalim]

terrible price to buy BTC at such high prices

But then we’re selling a ton of them immediately at the tube at the same prices.

[masterOfDisaster]

I’m on the fence regarding the transfer to NuLagoon Tube.
On the one hand I think it’s important to offer BTC at a tight spread for LP who ran out of BTC.
On the other hand these BTC might have a better place in a gateway at an increased buy side offset.

I think I’ll withhold my signature until I’ve made up my mind.
The situation is dire enough to keep T1.1 low or even empty.
It’s likely that I don’t sign the tx until the BTC price dropped and we got additional BTC on reserve or NSR got sold and provided us with BTC.
It just feels painful to fuel daytraders with cheap BTC - what would be a likely resultof sending them to NLT; either the traders grab them directly from NLT or through ALP once the LP refilled their BTC at NLT.

[ttutdxh]

It’s likely that I don’t sign the tx until the BTC price dropped and we got additional BTC on reserve

It just feels painful to fuel daytraders with cheap BTC

That does not make any sense, if BTC price drops we will have to pay a lot more BTC for the same amount of NBT liquidity. If you consider BTC price is at peak, I don’t see a better time to empty our BTC reserves.

[Nagalim]

We need to refill the tube.

[Dhume]

And as an unintended side effect the BTC I bought today is already roughly 1200 USD more valuable

[masterOfDisaster]

if BTC price drops we will have to pay a lot more BTC for the same amount of NBT liquidity. If you consider BTC price is at peak, I don’t see a better time to empty our BTC reserves.

Don’t you sense the tragedy in it?
If the price drops, we should have sold all BTC, but won’t be in the position to do so. On the contrary - we will receive even more BTC that are worth less the more BTC drops.
If the price rises more, NuLagoon Tube funds will be emptied in the blink of an eye, leaving us empty-handed.
We are always in a bad position.
The BTC might be better used for keeping gateways funded until there’s a little less volatility at BTC.

We need to refill the tube.

When?

This is pretty much all that stands between the traders at Poloniex and the total loss of the peg there:

Sat May 28 22:10:41 UTC 2016
status of zoro dual side NuBot at Poloniex:
nud getliquidityinfo B | grep BJs4YbtaqCmxeHLiR6zzjnZEotYVFAPfMo -A 2
        "BJs4YbtaqCmxeHLiR6zzjnZEotYVFAPfMo" : {
            "buy" : 3861.05,
            "sell" : 18331.5422
status of mOD dual side NuBot at Poloniex:
nud getliquidityinfo B | grep B9gXptkoqAApF3AFrQyhUbhSzvuEudxupt -A 2
        "B9gXptkoqAApF3AFrQyhUbhSzvuEudxupt" : {
            "buy" : 1215.01,
            "sell" : 3000.9037

I’d rather put some more BTC there…

[masterOfDisaster]

15 BTC to each zoro’s and mOD’s Poloniex gateway

Signed 1 of 5/8

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

Reasoning:
BTC price continues to climb for now.
The 50 BTC on reserve is the last money Nu has.
None of the NSR, that are on order at Poloniex, have been sold so far.
Sending BTC to NuLagoon Tube will make them disappear get traded to NBT in the blink of an eye.

We need them to support the gateways.
My gateway has a buyside offset of 5% and still traded $3,000 to NBT.
NuBot might react too slow on price surges. I don’t know.
All I know is that we need th BTC there and not at NuLagoon Tube.

@cryptog, @Dhume, @dysconnect, @jooize, @mhps, @ttutdxh, @woodstockmerkle
would you rather have some peg support for hours at Poloniex, or make daytraders happy for a few seconds with 0.1% spread at NuLagoon Tube?
Remark: once NuLagoon Tube has no BTC, there’s no trade and no bad peg support reported by Coinmarketcap…

Don’t sign the deposit to NLT, sign the one to the gateways!

This might look differently once the gateways at Poloniex are out of BTC:

[cryptog]

I am ok with signing your tx to refill the gateways now but i think 15btc is too much.
Maybe 10btc, one third of what we are trying to put into the Tube is more appropriate.
If we do not show that we can provide liquidity when there is demand for getting out of nubits, as it is the case now, we are failing the purpose of NuBits, which is to provide liquidity to hedgers, right now.
I agree though that we need to be careful not to lose too much money in the short term but the bet is that it will increase confidence in the peg in the mid term which would create demand for getting in Nubits when there is bitcoin volatility in the opposite direction.
It s painful to refill the Tube but as a startup we need to take that bet.
That is why we need to refill the Tube as a first priority right now, i believe.

[masterOfDisaster]

I am ok with signing your tx to refill the gateways now but i think 15btc is too much.

There’s in total only 10 BTC left in the gateway accounts at the moment.

If we do not show that we can provide liquidity

Face it: we can’t at the moment. NLT will have the BTC traded in less than 30 minutes. Wanna make a bet?
The gateways can keep a kind of peg for hours with it.
Maybe we should just provide all liquidity with a spread of 1% or below.

we are failing the purpose of NuBits, which is to provide liquidity to hedgers, right now.

If you send BTC to NLT at the moment you will completely fail to provide liquidity soon after.
With the gateways there will be liquidity, but at a not so good spread.
What’s better:

• no liquidity at all?
• some liquidity at a not so perfect spread?

It s painful to refill the Tube but as a startup we need to take that bet.

Wanna take the bet? NLT BTC will be gone within 30 minutes after deposit.
I bet 5 NBT.

That is why we need to refill the Tube as a first priority right now,

Bad decision.

[Dhume]

After careful consideration I’m inclined to agree with MoD, right now BTC is going nuts (which absolutely baffles me) and we dont have the funds to keep this up much longer.

It’s seems we are now faced with the choice of a complete peg breakdown after out last BTC get scooped or a weak peg with larger spreads which will buy us more time. If we have to choose between no peg or a weak peg I prefer the latter. I will sleep on this dilemma and probally sign MoD’s tx tommorow.