Park Rate Voting

Nagalim 2015-04-29 01:14:20 UTC #157

I didn’t want to muck Cryptog’s feed thread up, but I think this rate progression should be flipped when decreasing rates. I.e. longer periods should be valued less than shorter bins if you think we have reestablished the peg.

I personally don’t like the NSR dive and would be burning NSR for NBT right about now to take advantage of those park rates if such a thing were possible. What I’m saying is, I don’t think we’re out of the deep water yet.

cryptog 2015-04-29 08:16:24 UTC #158

I ll think about that.

mhps 2015-05-02 04:33:43 UTC #159

Can someone remind me why the park rates are around 12% while buy and sell sides liquidity (44k and 70k, respectively) are not far from balanced?

Nagalim 2015-05-02 05:33:37 UTC #160

People are responding to the NSR price. We should keep the park rates as they are and burn NSR for NBT, in my opinion.
But that conflicts with the auction, so it gets confusing. This is why we need decentralized burning.

If we aren’t burning, I agree we should reduce park rates and just deal with the low NSR price.

As a side note, is it possible to provably park? It would be interesting to have a motion like: Buy NSR > Burn for NBT > Park such that we successfully kick a portion of the problem down the road until we have a chance to develop and grow.

For reference, I just changed my numbers, because I don’t think we’re going to get a good burn mechanism soon. I’m currently going 10% for 11.4 days, decreasing linearly (quadratically in time) to 8% at 6 months and sharply dropping off from there down to 2.5% for 4 years.

Cybnate 2015-05-02 07:30:55 UTC #161

It puzzles me too. We also burnt a lot of NBT recently so the pressure on the peg is much lower.
Hope the launch of two new liquidity pools soon will change shareholders’ minds.

cryptog 2015-05-03 14:02:11 UTC #162

There are now more than 100k NBTs parked.
We saw an increase of more than 50k recently.
In terms of liquidity, we have:
44k in buy side
70k in sell side

So 38% in buy side. That is more than the 25% limit criterion advocated by JL.
I think we should reduce rates from now on.
I will do so in my feeds.

[NEW] Cryptog's Nu data feeds - BETA

Yurizhai 2015-05-03 17:27:26 UTC #163

I reduced mine yesterday as well.

JordanLee 2015-05-11 13:55:18 UTC #164

I don’t see any argument that could be articulated against raising rates right now, and the same is true over the last couple weeks.

Park rates have been consistently underutilized as our a method for maintaining the peg, which has placed the peg at unnecessary risk. It is definitely suboptimal to wait until most liquidity is gone to take action. That risks panic, erodes confidence and wastes resources. Shareholders should be constantly aiming to keep liquidity centered. It has been a mistake to not raise rates until liquidity is centered and balanced. The high cost of liquidity right now means there isn’t nearly as much of it as is desirable. This means what is there must be carefully maintained. Due to low levels of NuBit trading the volatility in the balance of the walls has been low. Liquidity being off center is only acceptable if it is short term (hours or a few days at most) volatility. If the average over weeks is off center, it indicates shareholder mismanagement.

Perhaps shareholders have been unaware that most liquidity is on the EUR/NBT and USD/NBT pairs on CCEDK. There has been very little on the BTC pairs for an extended period.

Those of you voting to keep rates the same or lower, would you share why please?

Sentinelrv 2015-05-11 14:11:07 UTC #165

Did you read the comment by Cryptog directly above?

dysconnect 2015-05-11 17:00:56 UTC #166

There seems to be some selling pressure on NBT (or some rush to buy BTC), and the buy side has shrinked. One thing I can agree about decreasing park rates is to do that conservatively, in an experimental fashion.

Nagalim 2015-05-11 18:01:30 UTC #167

I’m a big fan of decreasing the higher time bins and keeping the lower ones above 10% if you think park rates should gradually decrease.

JordanLee 2015-05-11 18:42:27 UTC #168

If park rates remain in effect for a long period of time, it simply means rates should be knocked down with an NSR sale combined with an NBT burn. An auction is in progress, but it is important to continue using park rates until that is complete.

creon 2015-05-11 18:44:46 UTC #169

Can you elaborate on that? What auction is in progress that will burn NBT?

I personally see no incentive from the shareholders to burn NBT currently, most even argued that they would not print NSR below market value. So parking would be the only option, but I am also hesitating and think if the buy side drops even more, maybe shareholders will panic and let a NBT burn grant pass, which would be in my interest.

Nagalim 2015-05-11 19:15:10 UTC #170

Can we grant nsr yet? I bet one of our tllp providers is overloaded in nbt and would love to burn like 1k or 10k nbt for 400k or 4mil nsr.

I don’t have a ton of money, but I would definitely burn 100nbt for 40k nsr right now.

Sentinelrv 2015-05-11 19:24:02 UTC #171

He’s referring to the B&C auction. I think he just means that we can’t do a NuShares sale and NuBits burn currently because an auction is already in progress and that could interfere with it, so it’s suggested that we continue using park rates instead until a better time comes along that this can be done.

JordanLee 2015-05-11 19:32:55 UTC #172

NBT won’t be burned as part of the B&C Exchange auction, but a successful auction would certainly have a profoundly positive impact on buy side liquidity.

JordanLee 2015-05-11 19:36:00 UTC #173

If the auction succeeds, no NBT burning will be necessary. If it does not, it will probably be time to discuss burning NBT from NSR sale proceeds.

creon 2015-05-11 19:45:10 UTC #174

Why? Do you mean because you are buying NBT with the BTC bids? These NBT will be future sell side pressure because they are used as salary for people who have to pay bills from this income.

I am also already excited to see how many bids were done in NBT, because looking at the current liquidity I think it is more than apparent that no single NBT was bought to make an auction bid and therefore every NBT that was used in a bid was an NBT which was held before and will now be sell pressure.

I hope you are right. If we, as usual, wait for the very last second to take any action, and the buy side liquidity will drop so much that you cannot pay your contractors for B&C anymore, then we will have to pay a pretty good premium to someone for burning NBT. If we do it before our house is burning, then we might get a much better deal.

mhps 2015-05-12 04:00:42 UTC #175

I thought the high cost of liquidity is mainly due to exchange default risk and BTC/USD price volatility risks. No amount of liquidity in NBT/BTC will change liquidity price. Please explain if I am wrong.

Cybnate 2015-05-12 09:21:06 UTC #176

Don’t want to answer on behalf of Jordan, but I do think given enough competition the liquidity price would come down. I don’t believe the exchange default risk and BTC volatility are priced right at the moment. Especially if you take hedging opportunities into account. The market is still immature I believe due to complexities preventing some players to enter.

What I do struggle with though is increasing the rates even further. If there are still NBT floating around at these rates, I think there is a serious oversupply and we should look at other means e.g. burning. The auction would only provide temporarily relief and only if successful, but won’t solve the problem as all those NBT will enter the market again sooner or later. Let’s see what happens with the auction but I would advocate to burn NBT very soon anyway.