Without it, the funds wouldn’t have been enough to keep orders on the book on each side.
You explain it from an architect point of view.
I tell you from my experience: 2% for NuBots is great. Let ALP and MLP stay below 1%.
On the contrary - it’s keeping a slightly worse peg opposed to no peg.
Where does that misunderstanding regarding last line of defence come from?
Of course there needs to be sufficient liquidity at a tight peg.
If that liqudity is gone, fails, isn’t there, there needs to be support, unless you want to give up on the peg.
More liquidity means increased cost.
As long as it’s not clear what the support of trading at a close spread really costs, I won’t give up the idea of a paremetric order book with Nu funded bots as last line at an increased spread.
Again: if all runs fine (ALP provides sufficient funds), no one will ever trade into the Nu funded walls!
What service is worse: offering trades at 2% spread or not providing any liquidity on a side, because all funds have been traded to the other?
Do we really want to rely on arbitragers?
Do we want to stuff hundreds of thousands of USD into exchanges like we did when @KTm and @jmiller ran liquidity operations just to keep a tight peg?
How much money got lost back then?
Sure, but not at any cost and not without reason.
