Gateway with built-in USD reserve

[masterOfDisaster]

Not without its issues, but one of the better proposals I have seen to maintain ‘stable’ reserves.

We will always have issues
To get a good combinations of “pros” and “cons” is all we can try to achieve.
A clever mix of centralized and decentralized, NuPaid and NuOwned approaches can help to stabilize different situations, while offering a good cost-effectiveness.

[mhps]

It will also need a number of exchanges with BTC/USD pairs

There is no lack of those.

Gateway operators will need accounts on those exchanges.

Yes. But usually a normal crypto account is suffice. No need to submit lots of information because no fiat deposit/withdraw is needed.

[mhps]

Edited OP to add another pro.

[Cybnate]

• Automation needs development.

Automating transfer does need development, but also increases the security risks. Funds will have to be withdrawn automatically to other exchanges. This requires a sophisticated authentication mechanism, probably still with manual approval from operators to reduce the risks of people tricking the bots into inappropriate transfers.

[mhps]

Automating transfer does need development, but also increases the security risks.

Yes but balancing multi exchange reserves doesn’t have to happen often and can be done manually.

Actually the part in “Way to lower exchange default risk by using multiple exchanges” is a multi-exchange reserve manager. It can be made into an independent product not limited to USD or Nu, and does not have to be an internal part of the reserved-gateway.

[masterOfDisaster]

What about converting the proceeds of the next NSR sale to USDT and keeping them on exchange until this scheme is complete and has been voted on?
I suppose we’ll use Poloniex again - should we prepare an auction instead? I’m fine with doing another sale on Poloniex, but don’t have the capacity to conduct an auction of any kind.

I don’t like the centralization and exchange risks this approach increases.
To be safe against BTC volatility and having the funds ready on short notice, USD (equivalent) funds on T2 are the most viable approach.

[mhps]

Sounds good to me.

[masterOfDisaster]

We are facing an interesting conflict between centralized and decentralized approaches - not only in terms of liquidity provision, but in terms of governance as well.

Nu’s liquidity provision isn’t steered by shareholders at the moment.
It’s done by FLOT based on experience and discretion.
Almost all buy side is NuOwned. This is with a different risk than ALP, but remarkably reliable so far.
FLOT is more agile than any shareholder consensus could ever be.
Let’s hope that FLOT decides in the best interest of shareholders.
I say, FLOT is handling this emergency quite well so far.

@shareholders, if you don’t think so, please create corrective motions!

Otherwise be greatful for having FLOT.
You may want to show your gratitude eventually.

[zoro]

Otherwise be greatful for having FLOT.

FLOT is the CEO of NU elected by shareholders

[masterOfDisaster]

Just because some of us act like that (I’m guilty), doesn’t mean it’s wanted that way.
There needs to be a duscussion about that.

Without the speed and tight consensus of such a board, Nu isn’t agile enough in emergencies.
With the discretion of FLOT or some of its members, shareholders don’t have full control.

If you look at how much I do and did (sometimeys even without consensus amongst FLOT members), because I think and thought it’s right that way, some will want to fire me (I’ll survive that, not being paid for most of what I do), others will love me for it.

There needs to be some regulation for it.
@Cybnate and others who demand that are right: a DAO needs governance.
This might be something for the lessons learned session, though.

[Cybnate]

If you look at how much I do and did (sometimeys even without consensus amongst FLOT members), because I think and thought it’s right that way, some will want to fire me

MoD is our benevolent dictator in times of crises

some will want to fire me

Dictators usually fire back We will be careful…

a DAO needs governance.

What can I say, a DAO without one is not a DAO.

This might be something for the lessons learned session, though.

[masterOfDisaster]

Dictators usually fire back We will be careful…

I loathe violence
Which is one of the reasons why I like the Nu network.

This might be something for the lessons learned session, though.

I didn’t want to prohibit a discussion or measures, that could and should happen now, with this statement!
Let me make it clear: I encourage all to take the initiative to do it now!

I meant, that I won’t take care of that myself now.
You might not believe it, but I have a life outside the Nu network and try to focus on the things I find more important than others - in the Nu network and anywhere else

[zoro]

I have a life outside the Nu network

No! I don’t believe it

[masterOfDisaster]

No! I don’t believe it

Maybe you don’t have it in yourself to believe enough?
Maybe I’m a stronger believer than you are

[mhps]

[Voting] Dual side NuBot gateways at multiple exchanges - masterOfDisaster

@masterOfDisaster
Automating a gateway will require reworking NuBot.

i don’t think it has to.

@masterOfDisaster
I don’t know how deleting orders works.

easy.

1. shut down the nbt/btc bot and the orders get deleted.
2. start the btc/usd bot with a shift that accelerates selling btc. Use nagalim’s bot to sell only a fraction of btc into usd.
3. shut down btc/usd bot and restart nbt/btc bot.

you just need a bot, and a shell script that shuffles two config files.

[Voting] Dual side NuBot gateways at multiple exchanges - masterOfDisaster

Ideally both bots would run at the same time and an overflow of BTC gets automatically traded to USDT, while USDT get traded back to BTC once BTC funds run low.Doing it manually is of course possible and would be the first step of playing with it.

I think trade USDT every 15min would be good enough.

@Nagalim’s nubot fork can adjust how big fraction of liquidity is put on order book. The nbt/btc bot can run continuously having only a limited amount of btc on the buy side. The rest btc will be picked up by the btc/usd bot to trade with usd.

Poloniex has no BTC/USD, only BTC/USDT. I think we need an adjusted wrapper, but I don’t know how to investigate wrappers for supported trading pairs.

Can we use the BTC/USD price feed for trading on BTC/USDT?That might be risky, but I’m not aware of a feed for BTC/USDT.

I see nbt and usdt prices can differ by several percent.

[Nagalim]

@Nagalim’s nubot fork

pybot. Different software entirely, no compatability. However, yes of course it can be run in conjunction with nubot via shell script.

[mhps]

pybot. Different software entirely, no compatability.

right. i got the name wrong.

[masterOfDisaster]

I’ve spent some more thoughts on the built-in USD reserve scheme.
It won’t work manually.

If BTC nosedives and a NuOwned operation receives a load of BTC, they need to be converted automatically to USD or USDT as soonas they reach a threshold.

Trying to do that manually will drive you crazy and you will likely be too late. You might find very many BTC and a way lower BTC price, if you just don’t recognize the drop, are asleep, at work, etc.

Plus I wouldn’t want to be responsible for that as operator of a NuOwned gateway.

The thresholds for automatic balancing BTC with USD can be part of the operating mandate and are beyond the responsibility of the operator.
Operators already have a lot of responsibility when dealing with funds they don’t own.
Please don’t put responsibility for volatility on top.

[mhps]

Do you think it feasible to put together a prototype by running nbt/btc and btc/usd pybots alternately?

[masterOfDisaster]

Automation would require that both run at the same time and not alternately.