Park rates are our method for short term peg maintenance

#1

With the buy wall at 11,000 and the sell wall at 61,000 I’m quite surprised to see rates being dropped over the last 24 hours. It is clear to me the costs and risks of lowering rates are at least 100 times greater than the risks and costs of raising rates right now. I
can’t see why there is any controversy in the matter.

I have around 50,000 in funds besides NuBits, and that is just enough
to meet my obligations to contributors over the next month. So I won’t
be offering any of that for liquidity.

The NuLagoon has some buy side liquidity that does not display in the client, but my guess is that it isn’t very much. @KTm may also have some, but again I don’t think it is much.

When the percent of buy side liquidity drops below some threshold,
which could be argued to be between 25% and 40%, shareholders should
always vote for higher rates, in the absence of any clear indication
that the liquidity figures are wrong.

If rates remain being offered for any significant period of time, it is a sign that NSR should be sold and NuBits burned.

Edit: right now, rates are only being offered for 3 months. A
protocol flaw that is on our roadmap to fix makes it so that when rates
are offered for a single duration rates will only be offered for that
exact block duration. So right now, our rates are 2.5% for 131072
blocks, but 0% for all other block durations. The parking UI doesn’t
allow for a precise block duration selection, so shareholders should
never vote for a single duration. You must vote for at least two
adjacent durations to offer interest rates that are functionally above
0%.

Update: I’m shocked to see functional rates still at 0% and the token lone rate at exactly 131072 blocks still declining. If you wish to break the peg, then you should offer 0% interest rates when buy side liquidity is low and declining. That is exactly what is happening. Anyone want to state why you are doing this? It doesn’t make any sense. If you aren’t going to watch the liquidity figures displayed right in your client then you need to subscribe to a data feed that will automatically configure your vote

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A question about the future of Nu development from the end of next month
[Passed] Phoenix compensation to change from USNBT to NSR
#2

This topic is now a banner. It will appear at the top of every page until it is dismissed by the user.

#3
#4

I agree that this is currently the case and everyone should do as you say currently. I don’t agree that this should be the case in the future because I think our priorities are backward. Parking is our way of faking adoption (people taking nbt off the open market) and it comes at a steep inflation cost. We need to be leveraging NSR for short term (day to day) peg maintenance and using park rates for medium term supply control (on the scale of months). Long term (year scales) nothing will benefit us but true nbt adoption.

That said, I agree now is definately the time for higher park rates.

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#5

Can you explain how the actual park rates are calculated? Its not really described in the whitepaper as I see it.

Is it a weighted average over the last 10,000 blocks? If so, then we should absolutely set much larger interest rates right now than we actually want to have in order to have a larger slope and should reduce them later. We also should take staking exchanges into the equation who surely don’t set any park rates.

So if I now want to set let’s say 10% for 131072 blocks, and I want this to happen soon, what value should I approximately insert? Surely much more than 10%!

#6

The share day weighted median vote over the last 2000 blocks are the protocol rates, with the restriction that they can’t rise more than 1% each day (actually 1440 blocks).

Shareholders have voted to take the weighting out (so each vote has equal weighting) and raise the maximum increase to 3% per day, but those changes haven’t been implemented yet.

#7

I have experienced some trouble with data feeds lately: the client would not pull them without clicking “ok” on the corresponding dialog box. The issue was fixed manually somewhat on my client but I am still not sure why I got the issue in the first place as I described in the following link: Bug - Nu client does not pull the data feeds

Would there be someone else with the same issue?
If yes, that might explain why the rates have not increased yet.

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#8

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#9
#10

Shareholders - please vote for 2 adjacent durations, for now.

#11

Also, it’s one thing to vote for a parking rate and it’s another to actually park.
I have nubits in my wallet - do I have to actually park them within the UI to actually freeze them and contribute for the peg?

#12

No, as long as you do not put them for sales.

#13

What if move them to a market to buy stuff like btc or nsr?

#14

@assistant park rates

#15

Hi @cryptog

The current park rates in the Nu network are:

32768 blocks: 0.000187% APR
65536 blocks: 0.001670% APR
131072 blocks: 0.008722% APR

#16

@assistant park rate votes

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#17

We have now:
22.8 days: 0.3%
1.5 months: 1.340%
3.0 months: 3.5 %

I think we should increase much more the rates for shorter periods than 3.0 months.

#18

I am confused by how park rates affect the peg. When BTC price is looking like to fall to a trader, say by 50% in the next month, you would need to offer more than 100% interest in the next month in order to persuade the trader to park instead of selling to the buy wall.

If you do offer the astronomical rate, you are basically paying the speculator and everyone else who parks the profit of a successful speculative trade (~100% a month in this example). This would be insane.

Am I wrong?

#19

Good remark.

Well the way I see it is that half of traders may decide to sell over the markets for a potential relatively big gain with less probability, half of traders may decide to park because it represents a certain but smaller gain.

#20

OK in my example above, to profit by selling Nubits is when BTC is expected to rise, not to fall. Park rate is offered so the trader gives up on speculative selling for park interest. Although a rising BTC (if it really rises as expected!) does make mopping up the printed NBT (interest paid) easier, using park rates to defend the buy wall seems still a questionable thing to do.

Yes there are several factors if a more sophisticated model is to be made. But the idea is the same. Shareholders have to figure out the right rates in a dynamic environment. That is very hard speculation.

The way out, as I see, is sticking to organic growth of Nu, only maintaining the NBT/USD peg.

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