It is time for immediate use of tier 6 liquidity (NSR sales)

JordanLee · May 27, 2016, 7:44pm

A single actor has sold between 64,000 and 72,000 NBT in the last 12 hours. That is about 10% of all NuBits in circulation. Where we were already using tier 5 a day ago, it is clear it is prudent use tier 6 liquidity immediately. This doesn’t mean we stop using tier 5 (parking rates). We need to step that up as quickly as possible at this point.

I had stated a couple hours ago that we were borderline for immediate NSR sales by FLOT. Since I said that I noticed another 12,000 NBT sale on Tube, making it very clear now is the time to sell NSR to support the peg. I realise NSR sales are about to be scheduled to occur in a little less than a week, but that isn’t soon enough. NSR FLOT members, what is the fastest and most effective way to get BTC for NSR? I am hoping each signer (@masterofdisaster, @ttutdxh, @jooize, @mhps and @cryptog) will say something about how to proceed.

We can choose multiple paths. But one ought to be very fast. It seems like the fastest path to NSR sales would be a deposit of around five million NSR to Poloniex and then placing a single sell order for around 500 satoshis. Wait a half day or so and then lower it if it doesn’t sell.

With only 11 BTC plus NuSafe’s 30,000 in tier 4, it is the right circumstance for an action like that.

This extraordinary NuBit sale appears to be the result of the Bitcoin breakout that occurred in the last day. In a short term sense, a Bitcoin breakout to the upside is the worst circumstance for our network. The best circumstance is to be at the end of a volatile bear market. This is the negative part of our cycle.

The system is working as expected. Maintaining the value of a currency when 10% of the money supply is sold within 12 hours is an extraordinary feat. We should all be proud. If 10% of US dollars were dumped in 12 hours (that would be 1.2 trillion USD), the US dollar would certainly drop in value a great deal. Ours didn’t. 319,000 USNBT have been transferred in the last 24 hours. Much of that is change, but it is clear an extraordinary percentage of the money supply is changing hands and moving around. The beautiful thing is the network and liquidity operations are functioning great. Everything is working.

The NSR price will be hit, possibly severely, in the short term. It is an opportunity for level headed investors who understand this is just a negative part of a normal cycle and that we are designed to withstand it.

So NSR FLOT members, what will you do to get us some BTC right away?

jooize · May 27, 2016, 7:59pm

*@Dhume

masterOfDisaster · May 27, 2016, 8:08pm

I’d have preferred a blind auction or a seeded auction, but I fear we won’t have time for either and the refill initiated by “Core and Standard” won’t be sufficient.
We are in a situation I tried to deal with when I wrote this:

As I didn’t continue that draft, because it was perceived as too complex, I didn’t waste efforts on ways to execute steps.
I fear I have no better idea than trying to sell NSR at Poloniex.
I’d rather start at a price level above 500 Satoshis, 600ish or so, but lower it faster than after 12 hours.
My availability is limited, but in general I stand ready to sell the NSR and withdraw the BTC proceeds to FLOT BTC reserve.

If we sell them at 600 Satoshis, we’re still within my daily withdrawal limit.

ninjaedit:
please have a look at [ANN] NuLagoon Tube's Offset to 5%, and NuLagoon's Commitment to NuBits's Liquidity and the succeeding posts.
Is the liquidty situation not as bad as it seems?

qucubert2 · May 27, 2016, 8:45pm

Then let’s not delay!

JordanLee · May 27, 2016, 9:06pm

I don’t think these large unconfirmed transactions are important in regard to how we manage liquidity. The trader that sold at least 64,000 NBT most likely did so to hold BTC. In that case it won’t be coming back anytime soon. It is also possible that they intend to buy NSR. Regardless, we will still need to sell NSR.

Nagalim · May 27, 2016, 9:28pm

NSR sales are basically scheduled to begin occurring tomorrow. FLOT can start selling whenever they want once they know the implied dilution amount. I say we wait for the Standard calculation (@mhps will probably toss it up for us in the next 12 hours) and follow through with it (sure, we can accelerate it to 48 hours or whatever, that’s within the scope of the motion). If we’re still in trouble after that, do another Standard calculation and do it again (this would be outside the scope of the motion, but does not break any rules per say).

Nagalim · May 27, 2016, 9:33pm

The best way to appreciate this would be to do bug fixes and submit pull requests and stuff.

github.com

Nagalim/SeededNuAuction/blob/master/auctioneer.py

#! /usr/bin/python

import jsonrpc
import sys, os

#Open addresses.txt
link = []
with open('addresses.txt') as inputfile:
    for line in inputfile:
        link.append(line.strip().split(','))

#Configure RPC
NUCONFIG='%s/.nu/nu.conf'%os.getenv("HOME")
opts = dict(tuple(line.strip().replace(' ','').split('=')) for line in open(NUCONFIG).readlines())
try:
  rpc = jsonrpc.ServiceProxy("http://%s:%s@127.0.0.1:%s"%(
    opts['rpcuser'],opts['rpcpassword'],opts.pop('rpcport', 14002)))
except:
  print "could not connect to nbt daemon"
  sys.exit(1)

This file has been truncated. show original

The first line in ‘addresses.txt’ must be the auction addresses. Other lines are registered address pairs from auction participants.

github.com

Nagalim/SeededNuAuction/blob/master/addresses.txt

BNjKzZtFtumiw3VNUVoWTNb8CoEtMZEEoN,SMNjMt4Wu2DKbDavbP6FyxA6nv4ZWgdGEP
B7yPu83vdJxVoauftfeNmXvrF3CtES663a,SdAF5SEsYYV4WW97pvbhcwmJnBBd9znw1d
BKM7kG5mwE6LVeprsDh7xjd5eEwJQatCgg,SSksApAeBXfi4QRia7XpHCARbJt3Ym95BW

Make sure your client is in avatar mode and that the auction is the only thing the nsr and nbt wallets are being used for.

@masterOfDisaster can you run an unseeded auction for block 896,000? I’ll send 5 nbt and some nsr if you want to practice with live funds. I’d suggest you run it a few times yourself to get the hang of it, maybe with some of your own funds, before you tell everyone the auction addresses.

masterOfDisaster · May 27, 2016, 10:50pm

I can try to get the auction running.
While the auctioneer needs to be trusted as much the custodian selling funds at an exchange, I hope Nu can get more BTC for the NSR if an auction is made rather than a sale on exchange.

Wouldn’t you want to hold this NSR auction and I try get the auction running, if it’s going to be used for the sale required by “Core and Standard” motion?
You already know how it works.
Plus I’m not near my computer over the weekend and trying to get this auction running from a terminal on a mobile phone is less than convenient

Welcome back! Long time no see

mhps · May 28, 2016, 12:54am

If that is their plan we are cornered.

zoro · May 28, 2016, 7:51am

There is a nice buy order at 400 in Polo!
Please hurry!

cryptog · May 28, 2016, 9:40am

Buy side is getting thinner and thinner.
I think we need to start selling some asap.
I am fine with 5m at 500 satoshis as proposed by jordan lee.
Maybe we would need more later.

What do u think?
We need 3 of 5.
I cannot be the executor sadly.
@ttutdxh @Dhume @masterOfDisaster @mhps

masterOfDisaster · May 28, 2016, 10:01am

I think we will agree that we should sell NSR.
Two of three required FLOT members are already in favour of it.

Regarding the way to do:
using one of my Poloniex gateway accounts (instead of blind or seeded auction) would allow putting BTC proceeds from the NSR sale automatically on the NBT/BTC order book.

cryptog · May 28, 2016, 10:09am

Nice. I m in favor.

masterOfDisaster · May 28, 2016, 10:11am

I’m always trying to think some steps (ok, at least one…) ahead

mhps · May 28, 2016, 10:11am

The Standard and Core motion already said how much the sell velocity is, and the buyback calculator has computed the number

p.s. I am fine with adjusting the sell velocity as the numbers in the motion was mostly a guess – but I want to see good reason to set to another number.

masterOfDisaster · May 28, 2016, 10:14am

Right, but I’m inclined to say following only “Core and Standard” motion and doing no extraordinary NSR requires two measures:

creating a redundant operation at Poloniex at a high spread (I can ramp up a NuBot on short notice)
increasing the buy side offset even further, if 2% buy side offset still gets BTC sold rapidly

cryptog · May 28, 2016, 10:56am

I think we meed more than 5k right now.
Even 10k do not seem a lot.

cryptog · May 28, 2016, 11:14am

Can either @ttutdxh or @mhps or @Dhume write a nsr unfreezing tx from Nsr flot to a specific address ?

masterOfDisaster · May 28, 2016, 11:41am

I was about to craft a tx to deposit 500,000 NSR to my Poloniex gateway account. This is maybe enough to fulfill the requirements of the “Core and Standard motion” and might get us $5,000 in BTC.
I can use the proceeds from the NSR sale directly for funding the NuBot gateway.
Each sold NSR replenishes BTC buy side.
If the 500,000 NST aren’t enough, we might do another round.

The deposit address there is SP9nvw4RviJKN5Nn3v15ACHQgfwjfbauha

Alas, blockexplorer.nu is offline and cointoolkit relies on it.

@Ben, @JetJet13, can you please kick the blockexplorer?

I don’t know how to make use of http://blockexplorer.ddns.net/ for cointoolkit. Plus it seems to be offline, too. Maybe it’s just my connection.

edit: I bought a fistful of NSR and made a test deposit.
SP9nvw4RviJKN5Nn3v15ACHQgfwjfbauha is working.

mhps · May 28, 2016, 12:27pm

Don’t know about that. How about 2 million NSR for a start?