I have made a proposal to decrease the spread on my ~20,000 in liquidity to 0.5% from 1%. Please read and comment.
I have seen several people on Reddit say that this is the reason they no longer use NuBits. They gave it a try, but liquidity wasn’t consistent and they had problems cashing out when they wanted to.
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I’m only aware of one trader who said he couldn’t trade 2,000 NBT at Poloniex whenever he wanted to.
The average liquidity is much higher at Poloniex, except during price adjustments.
While I’m grateful for feedback, I don’t understand the nature of the complaint.
Who else complained about lack of liquidity and what order of magnitude of liquidity was expected from those who complained?
Even if traders can’t predict the market or use NuBot price adjustment delay to their benefit, liquidity costs increase, if more liquidity shall be provided.
Traders at exchanges don’t need to pay tx fees.
They provide no benefit for Nu.
It’s regular use of NBT for payments that needs to be fostered.
To trade some thousand USD worth of NBT there has always been enough liquidity at a quite tight spread.
But it didn’t allow a breakthrough of NBT.
This was not due to lack of liquidity.
How shall more liquidity fix that?
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The one you mentioned was one. Unfortunately I can’t remember where I saw the other comments. If I find them I’ll post them.
For one writing and complaining about it, there are usually several others only voting with their feet.
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Can any Nu community member help to broadcast the existence of NuLagoon Tube to the Reddit. We really appreciated it.
LPC and customers are opponents offers?
If LPC get profit, the customers suffer loss, vice versa, isn’t it?
How can a company(Nu) survive by bleeding blood of its customers?
That’s why I choose B&C, which is neutral in trading.
B&C also charges customers fees. Every business does.
If gambling is a business…The “bankcrupt” probility is quite high.
Nu company is a pure gambler. As early as Sep. 2014, I asked David “what’s your profit model”. The answers never satisfiy me till now. Every NBT sold on market is our liability, because we promise it is worhty of 1$. NBT is Nu company’s bond(with zero interest rate).
The BTC proceed by selling NBT is Nu’s asset, if the backing asset devalues, the probility of insolvency goes up, if BTC price soars, we have a holiday, we can easily buy back NBT even promote the NSR price!
However, gambler is gambler, I have zero sense of safety on it.
BTW, It seems I shoud not say something bad on Nu anymore. All I can say is that when the gambling house(B&C) ready, welcome & good luck!
That one was complaining about not being able to trade 2,000 NBT any second he wanted to on Poloniex.
source: https://www.reddit.com/r/CryptoCurrency/comments/4gtqs4/why_nushares_are_a_good_investment/d2lmnay
Should we really worry about making traders, trying to trade swings, not perfectly happy?
Is that the type of customer we want to attract?
source: https://www.reddit.com/r/CryptoCurrency/comments/4gtqs4/why_nushares_are_a_good_investment/d2laby2
Why didn’t he use USDT instead?
Not withdrawing USDT should make it as convenient as using NBT.
I suppose he tried to profit from the delay between the BTC price moving and the NBT orders being moved.
What other explanation makes sense?
If my assumption is right, I don’t care about making that customer not 100% happy.
If there are several others in the same position, I care as much about them.
Not on a large scale I believe. That’s why I advocate for keeping the target on NuPool, but lowering ALPs spread to encourage trading within a certain bandwidth. 15k on NuPool is enough to play with. Higher amounts come at higher spreads/costs which the NuBots take care of. Once we have B&C we can increase targets as transactions will go directly into the blockchain and thus attract fees.
what? where this comes from?
Of course you should say what ever you are thinking about NU. This forum is not censoring
anyone that is why i love this community!
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Jordan’s point is they are what we have now and decreasing spread actually increase profit.
Maybe we should fund @muchogusto’s controlled experiment if just to test the theories.
If decreasing spread increases profit, there’s no need to fund @muchogusto’s experiment, because he will make more gain by reducing the spread.
We should rather offer an insurance:
if @muchogusto makes a loss with the reduced spread, Nu covers that loss or even overcompensates that loss honoring the experiment in a financial way.
@muchogusto, what do you think about that?
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Absolutely.
However, as @PinkyAndTheBrain has pointed out, as per basic economics,
liquidity will not be provided if the provider does not feel correctly rewarded and incentivized.
IMHO, that means:
- the guarantee to make money (statistically, that has not been proven I believe)
- the right and easy tools (transitioning from manual monitoring to much more automation)
- the visible and obvious market driven demand for nubits (public evangelism and marketing plays an important role here, a la ethereum team)
The problem is many fold. but the crux is I think we’re losing ground to Tether because of a lack of a use/strong tie to fiat. If we had the absolute and quick fiat exchange, we wouldn’t need to pay for the BTC/NBT peg. It would create itself.
Cross post from Liquidity provider profitability experiment:
As I see NBT is loosing ground to Tether because polo fully integrates tether. In times of volatility NBT and Tether are used a lot by speculators. Without the volatility we see decreased use. Tether is on the rise because you can get to fiat readily through Bitfinex. NBT simply doesn’t have that - sorry to say but CCEDK doesn’t have the mass that Bitfiniex does.
NBT claims usability because it is tied to USD, but its hard to get there without easy fiat exchange. As it is tether is doing our job “better” because all the users are creating the peg without being paid.
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I have long thought Nu should do that to all LPs. LPs bid on reward for providing balanced liquidity with own fund in a given accounting period, and Nu pays the lowest bidder such that the bidder takes away the the amount put in plus the reward at the end.
Yes, we should worry about making traders and arbitrageurs perfectly happy using NuBits. They are the low hanging fruit in terms of NuBit adopters. We can provide them with something they really want right now, at the size that we are today. We could experience major growth merely from having 2 or 3 automated arbitrage operations use our product. All we need is liquidity and for them to be aware of us. They are actually likely to be aware of us because such people are closely connected to the blockchain space, so if can’t attract them it will be because of poor liquidity.
I would like to ask those that are suggesting traders and arbitrageurs are not the right market for us to articulate what they think our ideal market is at this point in time. I don’t see any type of customer that will be nearly as easy to please as traders and arbitrageurs. A claim that this isn’t the right market can’t really be intelligently evaluated without comparing it to what you think is the right market.
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We have this on Bter already. I’d suggest it has a much smaller effect than you are implying.
Nu is supporting this market for over one and a half years now.
Where has it brought Nu? How many - or should I say: how little - fees were destroyed supporting mainly on-exchange trades?
A claim that this is a low hanging fruit should turn no blind eye on the fact that this low hanging fruit might cost money.
How much can Nu afford?
How much does Nu want to afford?
Before we seriously consider to ramp up liquidity operations, we need to evaluate the costs for doing so. After one and a half years we still have no reliable data. ALPv2 is brand new and no one knows whether it really can fix the (economical) defects of the previous pool scheme.
If you start ramping up the operation, you either need to be sure that ALPv2 is reliable or you need a reliable backup.
We don’t have a big enough reserve to provide NuBots with Nu funds if the liquidity operation would be scaled up big time now.
How else shall we support the peg if ALPv2 fails and the Nu funded bots don’t have sufficient funds?
That’d leave only NuLagoon.
@muchogusto already made an offer to allow gathering data at Poloniex and I did the same albeit on a different way for hitBTC.
Better fo that kind of homework before bringing the peg towards the brink of an abyss.
One target market for using Nu products should be payments. Payments cause transactions on blockchain. They destroy fees. That generates permanent revenue.
NuDroid is very well suited to support that.
It hasn’t taken off.
Maybe we should try to find out why and work around that?
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