Announcing: Trustless liquidity pool operation "NuPool" on Bittrex.com
In a nutshell: You run a program that places NBT and BTC orders on an exchange at 1 USD with a very small spread. The program will send proofs of those orders to a server which in turn pays you interest in the form of NuBits.
Welcome to NuPool, the first trustless liquidity pool operation run by the community members @woolly_sammoth, @creon and @willy. It will be formally run by @woolly_sammoth.
The "NuPool" operation is a result of the trustless liquidity pool beta maintained by @creon, which is documented here.
This is a shareholder funded operation, which has been granted 1800 NBT in this motion.
II. What we do
The "NuPool" operators will provide a server, that will validate the liquidity your client submits to us.
You'll always remain in full control of your funds throughout the operation of the pool.
- 20,000 NBT liquidity target on Bittrex.com
- 30 day operation maximum compensation of 7.5% per month (0.25% per day)
- Minimum payout of 1 NBT
- Payouts every 24 hours
Users compete with each other through a predefined "minimal interest rate", by which the users tell us the minimal interest they are willing to provide liquidity for.
Please note that orders provided with the lowest specified rates will be used first to fill the target. Once filed, orders that demand higher minimum interest rates will not get compensated.
III. What you do
You'll set up and maintain one of our two clients (client.py or Plunge.) Once the client is set-up correctly, there is very little effort required to keep it running. Checking the logs on a regular basis is highly recommended.
Running this client 24/7 is also recommended. A stable and responsive internet connection is a must.
Participating in the NuPool has several risks:
Hedging: Traders might be able to successfully hedge against you. This means that people speculate on the BTC price movement and buy NBT from you at a low price and sell them back to you when the price is high (or vice versa).
Exchange Default: This means that the exchange itself might cease the operation and won't return the customers funds. A situation like this has happened many times in the past (most prominently on BTER a while ago).
Connection Issues: If you are running an automated trading bot then it requires a stable internet connection to perform actions. If your internet is suddenly broken, or your computer restarts without closing the client software correctly, then there might be open orders left on the exchange which won't get closed until the connection is re-established. This would allow other traders to take advantage of your mis-priced orders
Important: The pool operators are never in control of your funds and are not responsible for any financial loss that might occur because of any reason whatsoever. Taking these risks is what you are getting compensated for. Please make sure that you understand what kind of service you are providing during participation and don't use any money you can't afford to lose
PLEASE BE AWARE THAT AUTOMATED TRADING WITH THIS SOFTWARE MAY BE RISKY, ADDICTIVE, UNETHICAL OR ILLEGAL. ITS MISUSE MAY ALSO CAUSE FINANCIAL LOSS. NONE OF THE AUTHORS, CONTRIBUTORS, ADMINISTRATORS, OR ANYONE ELSE CONNECTED WITH NUBITS, IN ANY WAY WHATSOEVER, CAN BE RESPONSIBLE FOR THE USE YOU MAKE OF THIS SOFTWARE
By using any software in this package you declare to have accepted the afore-mentioned risks.
And to repeat: Neither the developer of this software, nor the liquidity operation on NuPool.net is in any way related to the official Nu core-team.
By using the said software connecting to the "NuPool" operation, your highest possible return will be 7.5% for the length of this operation (30 days.)
VI. Getting started
Support can be reached over the following channels:
Can the pool operator steal my money?
No! Cryptography allows the user proof to the server that the orders are placed without giving it access to the funds. The data sent to the server only allows to view the current order status.
So I cannot lose money?
You can lose money if people are successfully hedging against you or if the exchange gets hacked. It is this risk what you are getting paid for. There is a lot of information in this forum on this topic and there are ways to transform the hedging risk into a calculable fee. Note that users are fully responsible for their funds used in the operation. More details can be found at point IV "Risks" in this thread.
Is this legal?
The server will be ensured to run as a completely legal operation. The legal situation regarding participation depends on your home country. It is often considered similar to Bitcoin mining, but this doesn't have to be the case. (We are not able to give any legal advice at all regarding this, so please consult an expert if you are not sure).
Do I need a good computer to run the client?
No, you only require a stable internet connection and Python.
Is there a minimum or maximum amount of liquidity I can provide?
There is no minimum. However, the server only pays interest up to a certain amount of liquidity, which is 10,000 NBT on each side in this operation.
Why is my client only placing very small orders although I have more funds on the exchange?
This means that other participants are offering a better minimal interest rate and therefore will be prioritized when liquidity is compensated up to the target value (see question above). If your client sees that the own liquidity will not be compensated then it will remove those funds. If you are not planning to reduce your minimal interest rate, then you may want to consider removing some of these funds from the exchange to reduce your risk.