Grant to provide 50,000 liquidity to Exco.in for 60 days

NuShares Passed Grants
#1

The following is the first of TWO custodial grants that will be requested. Grant the first means that shareholders agree to be bound to pass the second grant in the amount of 9,999 NBT upon satisfactory completion of the proposal. I ask for payment after LPC services are complete, but the first grant is necessary as @JordanLee mentioned to allow broadcast of liquidityinfo. First custodial grant pair:

BB1eCrqde2g5vWTH7RsaBJ8NWTUF2D8ogq, 1

The text of the proposal (previously a motion) is unchanged and the hash will remain just for reference, not because it should be entered in the client:

116a6fe769f71b1d49fa6bdded191b1e53d96551

Start proposal
First, I want shareholders to pass a motion
use my LPC services. When the motion is over, I will begin by providing
liquidity for sixty days using NuBot to Exco.in in the amount of 50,000
NuBits total. To begin, 25,000 NBT and the equivalent of 25,000 NBT in
BTC will be used for balance. When the sixty days are past, and I did
everything I promised, shareholders are required to pay 10,000 NBT
through a custodial grant to an address I choose. Therefore, I extend
trust to shareholders, not require shareholders trust me with money
first.

I use spread of 0.2% if Exco.in no charge my account fees, and 0.4%
if they do charge fees to me. If parametric order books are available, I
will use a 0.1% spread and a curve that approximates the level of
liquidity in the Bitstamp BTC/USD market.
End proposal

You have questions for me?

3 Likes
We need much more liquidity providers....Let us think of strategies
[Passed] Grant to provide liquidity using NuBot on hitBTC - the begin of modPuddle
[PASSED] Motion to modify terms of custodain grant
We need much more liquidity providers....Let us think of strategies
#2

Tks for your proposal.

  • So you would put 25,000 NBT on the sell side and 25,000 NBT worth of
    BTC on the buy side of NBT/BTC ?

  • 20% seems too much as a reward, to me though the duration is 60days.

  • I don t think you can adjust the spread.

  • Another thing is that a custodian vote is more appropriate here than
    a motion but since you want the shareholders to check your work
    before getting the reward, a motion is indeed necessary.

But this proposal is a good start, overall. I am waiting for other shareholder’s opinions before voting.

EDIT: You need a custodian grant because you would need to broadcast liquidity info

#3

Exactly.

I have much risk. Exco.in could get hacked and I lose all. NuBot could malfunction, especially with a new version.

In that case I will accept the default.

#4

have you calculated how much you will lose in a sudden btc price down or up?
lets say that BTC will be in 50$ during those 2 months or even at 400$.
perhaps even the 20000 NBT will not make up?

1 Like
#5

Good point, @seki. BTC exchange price is other risk. It is possible to hedge at OKcoin and Bitfinex (they even allow margin), but I am a Bitcoin bull at prices of today.

To clarify, 50,000 is the initial liquidity I bring. If BTC goes down after I start, then there will be less. But if BTC goes up, there will be more. I won’t withdraw extra.

#6

@muchogusto, you will need a custodial grant passed in order to propagate liquidityinfo throughout the network. I suggest that if your motion achieves enough support that it looks like it is going to pass, then go ahead and create a request for a custodial grant in the amount of 1 NBT. That way, you can begin distributing liquidityinfo a few days after your motion passes, if it passes.

#7

Just to be clear: You’re not saying you will distribute any earnings as dividend, are you?

#8

I will not distribute a dividend under any circumstance.

#9

I will do.

#10

After thinking more, it is best to only ask for a custodial grant of 1 NBT, rather than asking shareholders to pass a motion followed by a custodial grant of 1 NBT.

I will change the original post to ask for a 1 NBT custodial grant. If that passes and I do what I promise in the proposal, shareholders obligated to grant an additional 9,999 NBT upon completion of the 60 day contract.

Custodial grant pair:

BB1eCrqde2g5vWTH7RsaBJ8NWTUF2D8ogq, 1

1 Like
#11

hi @muchogusto, nice to see you here and read your proposal.
Excoin is an excellent exchange for the job, and I have been tweaking the bot in the last month of operations. ( My grant will be over on the 29th of Jan ) . You will have a nice task! Did you considered asking for the 10k NBT equivalent in NSR?

This makes me wonder… Is there any trust-less method that do not require an additional grant to pass and make the whole process a bit faster? For instance, releasing the whole 10000 grant now to a multisig address held by two shareholders + @muchogusto.
As soon as the 10k are granted, the two shareholders can park 9.999 NBT for 60 days. If service was successful the 9999 sum can then be transfered to an address owned by @muchogusto.
For this we would need to have the ability to park without premium, which currently isn’t available.

EDIT: actually parking is not necessary as @muchogusto will not be able to spend any funds without the two shareholders sign.

What are your thoughs @sigmike and @JordanLee?

EDIT2: can I suggest @muchogusto to edit the title to “draft” until we reached some more clear agreement on what we should vote for?

1 Like
#12

The system can not do this. I want to use the decentralized system that is Nu. @JordanLee has said of the importance of using the decentralized mechanisms available in the system. My proposal requires no action of specific individuals.

The method is not decentralized. My proposal, if passed, will test the creditworthiness of shareholders in group, and I believe they will make proof they deserve credit.

Sorry for the confusion of changing from motion to grant. I didn’t know a grant was essential for broadcasting liquidityinfo. The proposal is proper now, I believe.

#13

This basically valid concern has been addressed by Jordan Lee and put into a proper relation to the @KTm and @jmiller grants. One important part in @JordanLee’s pleading for more support of LPC activity is this:

#14

Voted.

1 Like
#15

“JordanLee:
My advice would be that if you think it is too expensive, present a competing proposal that is less expensive. If you are unable or unwilling to do so, you cannot demonstrate that it is too expensive.”
—> convincing
I am considering voting

1 Like
#16

It also appears expensive to me given the risks. However the alternative is ‘Do nothing’. The issue is that this is somewhat attractive as long as JMiller and Kiara Tamm are still around. It is clear that the market for liquidity providers is not yet mature because of the perceived risks. The problem is that these risks can only be addressed by having a multitude of liquidity providers proving that the risk is low while still being very profitable.

It is good to read this: Decentralized liquidity without counterparty risk not yet implemented to gain a better understanding of the situation before making the decision to vote or not to vote.

I will vote for it given the above, the 60-day term which I like from a continuity perspective (90-day would be even better) and the lack of competing proposals.

2 Likes
#17

This “state of union” from Jordan Lee is I believe a crucial one.
I also called for more competition in my own LPC proposal here and for more providers here, since after more than 1 month of voting my proposal did not pass while at the same no other competing proposals were made.
I am convinced now shareholders should vote for @muchogusto 's proposal since there are no better proposals right now.
I will vote tomorrow since my computer where Nu is installed is away. I wish I could use my own json data feed but it seems a bug regarding some formatting need to be fixed.

1 Like
#18

It cuts both ways. I cannot demonstrate it is not expensive, either. Many don’t propose because they just can’t cough up that much money.

I suggest Nu just offer a compensation for exchange rate loss directly to the LPC, and a cut of exchange rate profit from the LPC, after the term is over. In current proposal Nu is paying for like 40% BTC loss (10k / 25k) up front but getting nothing if BTC price goes up.

For the long term if Nu can remove exchange rate risk from LPCs many more people would be interested in becoming LPCs by asking for compensation for their time and exchange default risk. If @Excoin wants to have bots, it would be attractive to do it out of its own pocket after the exchange rate risk is removed.

Edit: I wrote the above before reading Jordan’s decentralized-liquidity-without-counterparty-risk-not-yet-implemented, which sets the perspective right. I am now neutral to the current prosal and even stronger suggest that the shareholders remove exchange rate risk from LPCs to stimulate growth of LPCs, for the reason I said above

We need much more liquidity providers....Let us think of strategies
#19

So in your view, there are 2 type of risks:

  • exchange rate loss risk
  • exchange default risk.

In my understanding, the former corresponds for example to the decrease of BTC/USD in case LPC offers liquidity on NBT/BTC.

I believe that if we could somewhat minimize that risk by offering some hedging instruments (contracts) that Nu could pay for and that the provider would include inside the LPC proposal, we would be able to grow drastically the market of LPC mentioned by Jordan Lee.

#20

Right. There are many ways for Nu to remove or greatly reduce such risks – offering compensasion after the term, hedging, developing bots that exchange NBT/BTC by making an atomic execution of NBT/USD and BTC/USD transactions (this needs the exchange to cooperate and is basically what ShapeShift does, as I know. The liquidity offered won’t be as great but that is the cost of being exchange-rate-risk-free)