FLOT US-NBT Operations (sell side)


#122

With absolute numbers I mean that as long as an absolute minimum of funds is available, I don’t see an immediate need to balance, even if the sides are 40/60.
Say there are $45,000 on a side with a majority in exchanges, which are considered important at that time (say, Poloniex, NuLagoon Tube).
Why should there be need for a balancing just because the other side is above $45,000?

Imagine people putting funds and removing funds to/from ALP (thousands odf USD value). Does that necessarily trigger a balancing?


#123

There are many facets to this issue, one of them being the cost-efficiency of NuLagoon itself. But to directly answer your question, why should we wait until there’s an immediate need before trying to rebalance? The gap that was observed was not a trivial one, even though it did not signal a true emergency.

You assume that there’s always somebody able to constantly monitor the situation, react prompty and then lead to a fully signed transaction that will be confirmed within the appropriate time frame to deal with an imminent threat to the peg. This is not the case, and it is evident that fast response in T1 depends on the availability of funds of each individual LP/custodian, and FLOT spends more time worrying whether it’s nagalim or zoro or you who would next wake up for us to send funds to, and then worrying who will be the next person to sign. The reason is that, in a stable state, we individually focus on the type of imbalance that is of the main concern of our own roles, and when a particular party needs help they communicate.

When facing a truly urgent situation, what I’ve seen is that we end up having to scratch our heads on the most effective way to deal with it. Something like this: Oh liquidity is now 30%, oh but it swung back up to 40%, shall we sign this transaction? NuLagoon is dry, henry’s sleeping. Now lets see if zoro is there to get his NuBot working, but hey woodstockmerkle isn’t online yet, he’s should be waking up in 2 hours to sign this. k jooize is up GOSH WHEN WILL IT CONFIRM and then it takes another hour to end up in Polo.

Now as I’m writing this, there’s a 10k gap in T1, despite a heavy load of sell-side in NuLagoon Tube. It’s still not perfect, but if he hadn’t sent in the 15k we’d be doing the above right now, Without watching out for rainy days, we end up doing that more often; now we can afford more time to think and plan. For a while I found myself spending more time checking the next person to come online than actually thinking about the network. This is why it was also suggested that a regular balancing of custodian funds can be a good thing, and is the approach taken by nagalim. By more lenient terms of somewhat regular re-balancing we’d even be putting less pressure on T1 custodians, so it’s not just sweeping problems under the rug to save time for FLOT members.

Furthermore, with NuLagoon Tube’s pledge to waive fees and spreads for known LPs, it becomes a very good venue for NuBot custodians to balance their own liquidity. I have yet to confirm a working example for T1 custodians, but I anticipate that under an imminent threat some people will try it with some good volume. A healthy balance of NuLagoon Tube will actually reduce the need for direct FLOT interference in these situations. I appreciate that you signed the transaction promptly even under doubt, but the timing that I proposed the transaction at least would not have allowed a small debate to endanger the peg.

Assuming this workflow, more diligent balancing becomes possible; although this concentrates a lot of trust on NuLagoon, it is little more than what we’ve assumed from the first time we pay them for liquidity provision. This is indeed something to watch out for, as is the issue of how much responsibility NuLagoon is supposed to take, and more discussion and concern on this are definitely welcome.

Just some notes on what might be improved next:

  1. More transparency in the working hours of NuLagoon, and make sure there is good availability for it to put funds in Polo. For the 5000 NBT we pay for the liquidity. Cost cutting and deepening liquidity is a constant concern that I have no intention to refute.
  2. More eyes on T1 - while I’m not comfortable being a NuBot custodian I can consider a pure sell-side gateway. It’s still less than ideal that it messes up the accounting in my personal account on Polo, but not as much as a dual-side gateway would.
  3. I am still not comfortable with the idea of x NBT spread across exchanges. Though I’m settling down on 5k at 1% spread and 5k more at smaller spreads on Polo. To bridge the current gap in automation, it would be a good idea to put something like the Tube as a layer of abstraction between T1 and T4, so we let some part of T1 balance themselves via the Tube and them we balance the latter.

#124

I agree with a lot of what you’ve written, but I still don’t see why we shouldn’t consider the liquidity situation ok, if a sufficient absolute number of funds is available and still beg for taking that into consideration as well.
If there are are $50k on buy side I don’t care whether there are $100k on sell side, if the situation would be considered ok with $50k each side.

All Im trying to say is: we should care about a balancing, but about a minimum in each side as well. And I for one find the absolute numbers (maybe in relation to NBT in circulation) more important than the ratio.

Only looking at the ratio creates an attack vector, which can be used to trigger continuous balancing efforts just by placing and removing BTC on/from buy side.


#125

What do we stand to lose by rebalancing before the minimum? If it’s 50:100, what do we stand to lose by making it say 70:80?


#126

If we want to create a set of rules, these rules should be made considering experience, usability and attack vectors.
We need to make a lot more with regard to liquidity providing based on rules to be able to automate it.
We need automation if we want to scale Nu.

Have a look here, if you want to know what I have in mind:

If we don’t consider absolute values as well, we create attack vectors.
Derailing a buy/sell side ratio is possible by adding funds on either side, whereas removing funds to go below a threshold is only easily possible if they have been put on order before by the attacker.

That’s all I’m talking about - not necessarily the here and now, but a future in which Nu might have more automation.


#127

However, while there is a specific threshold of 40% currently, it is more of a guideline than a rule. FLOT is free to do what they think is best.


#128

There were times where the line 40% caused trouble, that we were kept busy watching it bounce back and forth. However, practically the trouble didn’t do much to FLOT funds, but rather exhausted some of our decision processes.

An absolute minimum level could help, and with a hard boundary it is not so easy to exploit. At worst the minimum level just has to be updated once in a while based on network conditions, and lacking a Theory of Everything on Liquidity Provision that should be the way to go.

I am inclined that the first steps in automation were developed to give a machine strict rules do most of the work, and we help to fill in the gaps when needed. In which case I that support a reasonable absolute minimum level of say 5% of total NBT liability, under the conditions that the human part of the operation should not be confined to this.


#129

Can i get 2450 nbt here:
BAoDAU3GwBVyaWC99kfUgJftzgi2FwuXDF

(Ill learn cointoolkit eventually)


#130

Signed 2450 NBT for @nagalim’s T3 custodianship:

verify

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

#131

Transaction is for 3365.508 US-NBT, not 2450 US-NBT.
Fee is 0.02 NBT.

I assume this won’t be a problem as it’s the usual address that receives larger amounts, and Nagalim will return any excess.

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

Signed 2 of 3-of-5.


#132

The input is 3365 but there’s also change to the multisig address. Nearly thought I was damned.


#133

wtf. Something must be wrong with me. Transaction is completely correct indeed.


#134

@Nagalim can we buy NBT from you? and what is the price?


#135

Price is bitfinex plus a variable fee. If i like you, the minimum fee is 0.1%. However, im gonna start charging 0.2% regularly soon. For now id probably still do 0.1%.


#136

Signed 3 of 3/5

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

and broadcast:
b0fef07193860d327036b9aa229d5b7e8d2c7cc89ab7e3cde8cbf79b637de6fc

Nothing is wrong with you :wink:
But thank you for all your efforts!


#137

approx. current reserves: $4999.76 BTC | $2.25 NBT

Could use another 2500 NBT


#138

Buy 71974.8163 Sell 37917.8054 7 on ALix.

10k to NuLagoon and 2.5k to nagalim (verify)

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

signing when I get hold of the key.


#139
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

Verified and signed 1 of 3-of-5.


#140

@ttutdxh @woodstockmerkle
Perhaps we should find a way to pay certain FLOT members for being more active without promoting unnecessary fund movement.


#141
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

Signed 2 of 3-of-5

Verify