Get NuBits' liquidity flowing

jooize · June 6, 2016, 6:43pm

Nu provides liquidity for US NuBits. Buy-side liquidity is low. Faith in Nu and NuBits depends on liquidity of NuBits.

Our actions until now have been to widen spreads, set Park Rates, and sell NuShares, while keeping some buy side funds (currently 39.74 BTC).

Actions that should be taken according to @JordanLee.

Push all remaining FLOT funds into buy side at tight spread.
Set appropriate Park Rates.
Advertise Park Rates.
Sell NuShares and push proceeds into buy side at tight spread.
Grant additional NuShares to FLOT. At least prepare the grant.

Nu relies on NuBit sales and NuShare sales for buy-side liquidity now. I assume transaction fee income is currently insignificant?

Park Rates motivate NuBit sales. I’d be glad to have it explained to me other immediate effects.

We may have to dilute our shares. The alternative is to go against how the architect designed the system to work.

We can sell NuShares either by auction or on exchange. Several shareholders seem to prefer auctions. On exchange is simpler and possibly faster. I think we should do both. FLOT NSR may end up deciding when and how unless shareholders speak up. I can’t execute either myself.

Shareholders don’t seem to be in agreement with this being the best approach. There is recent discussion in [Withdrawn] Make Firing and Replacing Incompetent Liquidity Providers Our Top Priority.

Sentinelrv · June 6, 2016, 7:04pm

I want to add my observation about park rates from the other thread to this as well. People have been saying recently that park rates have been ineffective at increasing the buy side. @JordanLee posted this in response…

As I shared in the other thread, I tend to agree with this reasoning because of my experience with parking. I was going to sell my Peercoin stash to purchase NuBits and park them in order to receive the high interest being offered, but then I decided against it because I was afraid I wouldn’t actually make anything, or worse lose money.

For example, if I sold $5k worth of Peercoin to buy NuBits and park them, I would need to be sure that when it came time to unpark and sell my NuBits, that I could receive back the normal amount and not at a reduced price per NuBit like $0.95 cents, or else whatever interest I made on parking would end up being forfeited through the reduced NuBit price. It would therefore be too risky for me to park, which is the reason I decided against it.

So I believe that in order for tier 5 parking to have a chance at being effective at all, Jordan is right that we need to have a tight spread. Effective parking requires a tight spread at the time of unparking in order for it to be worth it for people to park in the first place, or otherwise any interest rewards gained will be lost. The only way to guarantee a tight spread at this point is to sell NuShares. So selling NuShares will give us more Bitcoin reserves, which can be put toward the buy side at a tight spread, encouraging people to park again. We’ll need to sell NuShares either on-exchange, as an auction or both at the same time.

jooize · June 6, 2016, 8:52pm

FLOT BTC has 35.74 BTC.

How many Bitcoins do we currently have on gateways? @Cybnate @masterOfDisaster

10568 USD is ~18 BTC.

35.74 + 12.28 + 18 = 66.02
66 BTC is ~38,505 USD.

masterOfDisaster · June 6, 2016, 8:58pm

I’m damn sure @Cybnate’s PyBots are empty on buyside for days.

Here’s the broadcast liquidity overview:

Mon Jun  6 20:54:43 UTC 2016
status of mOD dual side NuBot at Poloniex:
nud getliquidityinfo B | grep B9gXptkoqAApF3AFrQyhUbhSzvuEudxupt -A 2
        "B9gXptkoqAApF3AFrQyhUbhSzvuEudxupt" : {
            "buy" : 10568.606,
            "sell" : 25560.4409
status of zoro dual side NuBot at Poloniex:
nud getliquidityinfo B | grep BJs4YbtaqCmxeHLiR6zzjnZEotYVFAPfMo -A 2
        "BJs4YbtaqCmxeHLiR6zzjnZEotYVFAPfMo" : {
            "buy" : 7146.89,
            "sell" : 30720.5573

Detailed:

Mon Jun  6 20:56:50 UTC 2016
status of mOD NuBot session at poloniex:
        "1:NBTBTC:poloniex:0.4.1_1465224607305_580170" : {
            "buy" : 9076.1583,
            "sell" : 3000.0
--
        "2:NBTBTC:poloniex:0.4.1_1465224607305_580170" : {
            "buy" : 14.59,
            "sell" : 10557.6248
status of mOD NuBot session at poloniex:
        "1:NBTBTC:poloniex:0.4.1_1465224575280_ecf231" : {
            "buy" : 0.0,
            "sell" : 800.0
--
        "2:NBTBTC:poloniex:0.4.1_1465224575280_ecf231" : {
            "buy" : 0.41,
            "sell" : 10284.5621
status of zoro NuBot session at poloniex:
        "1:NBTBTC:poloniex:0.3.2a_1465241874104_e1bb47" : {
            "buy" : 750.0,
            "sell" : 1500.0
--
        "2:NBTBTC:poloniex:0.3.2a_1465241874104_e1bb47" : {
            "buy" : 6376.74,
            "sell" : 29220.5573

MatthewLM · June 6, 2016, 9:01pm

Why is that liquidity not showing on the Poloniex buy wall?

masterOfDisaster · June 6, 2016, 9:05pm

Too much offset to be on top of the books.
Sort this out. I need a break.

MatthewLM · June 6, 2016, 9:11pm

I see 9113.95666962 NBT for only 10 cents, and hardly anything above it except for 1250 NBT and 750 NBT orders. Is poloniex broken for me or something?

kimmel · June 6, 2016, 10:19pm

Ok, have been reading for quite a long time, although I wouldnt like to deep too much into the numbers… the most Liquid asset out there is Dollar.

Nubits has done quite a nice job, but can’t beat USD liquidity, and it shouldnt try because it will die trying it… trying to keep tight spreads is like saying USNBT can have more liquidity than USD and…sorry to say but I doubt that.

USNBT only can survive if it gives a decentralized liquidity at a reasonable rate.

Tether out there or uphold out there work with 100% liquid reserves, but they’re centralized, the can froze users funds.

So the only reason to use USNBT instead of USD or its alternatives in centralized methods is because this NICHE Market is willing to pay some more spread, but what they get is a DECENTRALIZED STABLE CURRENCY.

That is what USNBT aims to be.

Try to keep tight spreads will kill NBT
Try to compete with USD spread will kill NBT

When Bitcoin goes UP, NBT can’t stay pegged because otherwise would be used as a substitute of USD by traders…although someone may discuss it; it shouldnt be its main usecase… most of trading is in centralized exchanges and NBT shouldnt be competing against USD, it’s a suicide TASK.

For not making this post even more longer, trying to make investors win some money with not so tight spreads should be a priority for NUBIT.

Possibly NBT will loose VOLUME by increasing spreads when Bitcoin moves too much, but this will allow REAL USE CASES FOR DECENTRALIZED USD LIQUIDITY TO DEVELOP and at the same time, make NBT worth it by rewarding investors. Its a difficult balance to achieve.

I’m talking conceptually, because I’m lost in the details on how exactly the operations work but I have been following the project for quite a while and I think I get its basis

By the way I’m shareholder too for quite long time ago, and I have always found too difficult, too time investing to vote and to fully understand how the whole thing works… in fact I think just a few people here fully gets how all this workflow work and this is and will be limitating for this project…so 1st thing for scalating this may be making the whole think understandable and easy for strangers… add liquidity and get rewarded for adding it…sure… but simple numbers and clear marketing is needed :S

mhps · June 7, 2016, 2:47am

Excellent. I am glad that there are shareholders who have a clear view of the big picture. Sometimes I can’t help feeling there are just about 20 individuals who talk and care about where Nu is headed.

zoro · June 7, 2016, 9:25am

In a nutshell what we can do?
Provide much of liquidity in a nearly stable BTC period
and suspend liquidity in a high volatile BTC period?

Cybnate · June 7, 2016, 9:59am

We need to increase the sales of NSR for sure. Just wrote a draft, happy to add the auction into it. Will need an auctioneer though and Jordan is not willing.

crypto_coiner · June 7, 2016, 12:45pm

This makes sense to me.
I would have no issue in redefining our notion of the peg

mhps · June 8, 2016, 2:35am

I think it is better to discuss it here than in a flame thread:

original post

I admit I did not understand this before I get feedback from my bitcointalk advertizement of parking

As far as I understand that website, I’d need to BUY these whatevercoins using e.g. my BTC, then after a while I’d have a few more whatevercoins in my whatevercoin wallet. How is this BTC related or “lending BTC”? The return is denominated not in BTC but in whatevercoins, I need to use their client, their wallet and sell my BTC to get some…

and @Sentinelrv posted his experience. I don’t think the communty and FLOT in general realized this because we all just parked our own nubits.

Why this if spread on exchanges are set to <1% SAF ?

I have to know the details. Jordan’s idea of extracting value from NSR as if there is no tomorrow may scare most investors away permanently. We have been discussing gradually closing the spread using existing T4 and NSR sales. Since there seems to be an agreement that on-off tight peg is still very effective, we can for example

use limited fund to deploy from 5% to <=1% SAF, for example at 1%, 2.5%, 5% simultaneously or sequentially from high to low
observe how fast it is broken,
commit most of our T1 fund to where the selling stops
replenish T1 with existing T4 and NSR sales, the amount is limited, approximately equal to that lost in the first 2 steps
do step 1 again after some interval or trigger
until the spread is not broken again.

Isn’t this a better path ?

Sabreiib · June 8, 2016, 2:54am

Very strange, who tells Nu will beat USD’s liquidity? Is there any single of nushareholder planned to to it?

jooize · June 9, 2016, 11:22am

I feel regret over not acting quicker with a large transaction to refill buy-side liquidity as now appears to me having had a better chance of avoiding this situation (hindsight of course, and not obviously the case). I began waiting for NuLagoon Tube to adjust its spread (which didn’t take long, thank you!), then other ideas were presented that I felt compelled to consider, and struggle in making a decision from this point.

The Bitcoins FLOT holds belong to NuBit holders. Only legitimate reason to withhold them may be to better serve more NuBit holders, but that is not mandated. FLOT is supposed to provide Tier 4 funds when liquidity balance in the network is below 40% on either side.

Selling NuShares have all along been the consensus plan for peg support. That shouldn’t come as a surprise.

I think at this point limiting or using all Tier 4 funds for liquidity will not produce much different results.

I will act by what I understand is expected according to NuLaw, the way a DAO should function.

If shareholders wish to end NuShare sales in order to spare the power structure until a new plan is constructed, they need to pass such a motion.

Actions by consensus is a big part of what makes Nu valuable, albeit not monetarily profitable right now.

I have created and signed a transaction for 25.74036791 BTC to NuLagoon Tube.

cryptog · June 9, 2016, 12:14pm

Would you have the motion that points to this?

Everything is stated below:

… NuLaw was not kept by FLOT…
Will sign your tx.

So the question is why FLOT did not keep the rules?
2 possible reasons:

the motion were written 6 months and 1 year ago. It is difficult to remember everything.
Some kind of examiners or compliance officers are needed
the decrease of the buy side happened too fast. Basically the rise of bitcoin was too sharp. We could not raise the parking rates fast enough. We could not sell nsrs fast enough. We need a mechanism that can raise rates very quickly as well as a mechanism that can unlock funding from nsr sales very quickly.
Perhaps a continuous nsr/nbt conversion mechanism as advocated by @Nagalim is the solution

This combination of 2 things made FLOT try to cope with the sudden loss of buy side liquidity by basically discouraging the sell of nubits by raising the spread.

Edit: added info

jooize · June 9, 2016, 12:22pm

Not sure what to make of the 29% SDD.

cryptog · June 9, 2016, 1:07pm

Which motion are u talking about?
You imply that the motiom did not pass in reality?

Edit: add

jooize · June 9, 2016, 1:15pm

The one I quoted above that quote, f99ddf406a32d39be7d614c13dc1ce63c96e4003.

That’s what it might mean, yes. I don’t know the rules of Share Days Destroyed (SDD) for motions, or how to check what its highest point was using NuExplorer.

Never mind. It passed!

Go to http://blockexplorer.nu
Choose “Motions” in the menu.
Press the button “Successful Motions”.
Search for f99ddf406a32d39be7d614c13dc1ce63c96e4003.

cryptog · June 9, 2016, 1:41pm

According to these 2 motions we need to replenish the buy side 1), raise rates 2) and sell nsrs 3)z

replenishing is being done by sending reserves btcs to liquidity pools.
raising rates is being done
where are we?