[Passed] Accessible Liquidity - Encompassing NuLagoon Contract

NuShares Motions
#1

#Hash:
9d3538c6e95e0cfeae7afeeb5e82874a25040276

#Text:

##Funding and Accountability
NuLagoon support will continue indefinitely. Starting from the day in UTC that this motion passes and onward the compensation for active NuLagoon liquidity operations will be $150/day. Days in May before the passage of this motion will be prorated at $167/day.

A monthly report must be submitted by NuLagoon in a public, shareholder accessible way no sooner than 5 days before the first of the month. There will then be a 10 day grace period whereby shareholders have time to digest the document and potentially respond via motion. The document has no governing restrictions but must be communicated properly as the monthly report.

The reward will be paid by FLOT monthly, though NuLagoon may resort back to shareholders if FLOT is unresponsive for 5 days after the 10 day grace period has passed. Shareholders will then be obliged to pass a grant proposal within 10 days (25 days after the report was originally submitted) if NuLagoon has satisfied contract.

##Goals
The primary goal of NuLagoon is to provide accessible liquidity to specific supported trading pairs in the network in a reliable fashion. The general motivation for this effort is to increase nubit adoption in the network. This motion will seek to provide NuLagoon with a constant stream of revenue independent of service such that the organization can be more flexible. However, while shareholders keep in mind the motivation for paying NuLagoon, the liquidity providers of NuLagoon must focus on the primary goal of providing liquidity to the network in specific ways.

##NuLagoon Trading Pairs
A NuLagoon trading pair (NTP) is any tading pair suoported officially by NuLagoon. NuLagoon may support up to 5 NTP, but must support at least 3. NuLagoon will seek to use the same price feed mechanisms as other operations functioning on the same NTP. The NuLagoonTube is considered an NTP.

##Merit Thresholds
To aid in the direct measurement of NuLagoon service quality, shareholders can observe the imbalance of NTPs that NuLagoon supports. If an NTP that NuLagoon is responsible for has less than 10% liquidity on bid or ask side, measured using a 1.5%, this should be considered of bad merit. Conversely, if neither side is below 40% this is of good merit. Considering how long the NTP is in each of these states gives some indication of NuLagoon’s performance. The liquidity considered here includes all third party market orders in addition to NuLagoon’s.

##Liquidity Index
The magnitude of liquidity on an exchange is also very important. To avoid overloading shareholders with large numbers, the liquidity index for an NTP will be measured as follows:
LI = log ( A + B )
Where log () is the logarithm in base 10, A is the total volume of ask orders on the order book, and B is the total bid volume on the order book, measured within 1.5% offset of the price feed.

##T4 Obligations
Nu multisig reserves should seek to rebalance the network using NuLagoon. As this is compulsory, NuLagoon must offer a Nu-specific buy/sell price (and/or fee) to at least one Nu multisig nubit address and one Nu multisig bitcoin address. If either address is compromised, a new address pair should be chosen. If every signer of the address pair (limited to 1 nbt and 1 btc pair) comes to full consensus that NuLagoom is offering an unrealistic or otherwise manipulated price or fee, NuLagoon funding will be reduced to $0/day until at least one member of each multisig states that the price is fair once again.

##Automation and Future Services
Shareholders encourage NuLagoon to properly balance present and future liquidity concerns. The funds given are to be used at the discretion of the pool manager, and though they must ultimately report it to Nu, they have full authority to use the funds granted to improve the service NuLagoon provides.

##A Best Efforts Operation
The concepts of merit and accountability discussed in this motion are guidelines. The contract between NuShare holders and NuLagoon can and should be flexible and trusted. If, for example, NuLagoon would rather use 2% as the offset than 1.5%, it should take efforts to reveal the appropriate statistics in a transparent way. In this same example, one way to do that would be to form consensus with a service like ALix to adjust the reported offsets of liquidity. A more complicated but prevalent concern would be the price feed used, which should be agreed upon in a consensus process that is beyond the scope of this motion.

This motion overrides any contradicting previous motions, though the concepts and precidents set should still be acknowledged and used as guidelines.

Proposal created with Daology.org by nagalim for Nu

4 Likes
[suspended] Cryptog's Nu data feeds - BETA
NuLagoon Liquidity Operation Monthly Report for May 2016
NuLagoon fee request from 13 May to 14 Jun
[Passed] Motion dual side NuBot gateway at Poloniex by masterOfDisaster
[Discontinued] Cybnate's Nu datafeed - BETA
[suspended] Cryptog's Nu data feeds - BETA
FLOT compensation discussion
#2

No reference to activities needed?

#3

I think NuLagoon will understand that with only a 3 month contract they will not want to dally in fighting to increase their funding rather than let it dwindle. Hopefully, they will actively seek out what shareholders desire so that their future contracts are more and more lucrative.

Besides, there are other motions already spelling out NuLagoon activities and I felt that would be too much to take on in a single motion. Also, I would much rather NuLagoon write that contract themselves in a month or two after some deliberation.

#4

Can we discuss another option？ Improving service instead of cutting cost.
How do NuShareholders evaluate a new NuLagoon Pool which locks certain amount of funds for a longer periods of time.

The goal of this pool is trying to address is a scenario where there is increased risk that the peg will be lost that emerges fairly quickly. In that case, if people can, they may remove liquidity just at the time it is most needed. This panic among liquidity providers may cause the peg to break as liquidity disappears, whereas If they are contractually obligated to keep providing liquidity for weeks or months and there is a way to enforce that, then we will have liquidity even in high risk scenarios. The idea is credited to JL.

We actually already have done some work to design this new pool, and behind the schedule because of the creation of NuLagoon Tube. We could start the operation of this new pool in half month, if Nushareholders keeps the contract between they and us.

Best,
Henry

#5

This is about decentralization and accountability both. You could improve accountability but offering a majority of our liquidity budget to one operation will always be a centralization issue.

#6

NuLagoon is more than one liquidity operation, right? We are creating Nu things in innovative ways

#7

NuLagoon is not more than 1 liquidity operation. It only operates under 1 name, 1 total contract, 1 monthly budget, etc. That’s almost the point of this motion, to force NuLagoon to break up as a liquidity cartel. If you think you’re multiple operations, make multiple semi-independent contracts.

2 Likes
#8

The accountability definitely needs some improvement. We have seen multiple occasions where it appears the NuBots were not actively monitored for more than 24h. Or that there was no liquidity provision at all either deliberately or not on some of the advertised exchanges. I don’t think that is acceptable.

I can accept a temporary centralisation when there is a clear path or goal and timeline set out what it will achieve. Just transferring 5k/month and hoping something innovative comes out without a timeline and with poor performance is a bit hard to digest for me especially when US-NBT sales are staying behind. The Tube is a nice spin-off and appreciated by many, but it is just that and not related to the contract.

Not keen to support the motion in the OP but when you are lacking to come up with something better I would feel forced to do so. Hoping it doesn’t come to that as we can definitely use your services in some way or the other.

#9

What would make you keen on supporting it? If I proposed $166/day would you support this motion?

I would compromise at $150/day for the next 3 months, given the revisit after the contract period ends.

#10

To answer your question we will need to make a decision whether we can afford NuLagoon’s services in the first place assuming excellent performance and great outcomes contributing to the network. When that is not the case just curtailing the amount we are spending might not achieve the objective we are after.

I’m ok to pay more for excellent services, I’m not ok to pay even half the price for a mediocre service, I might be ok to pay half price for an excellent service accomplishing half the outcomes though.

1 Like
#11

So, given the poor performance in Poloniex (that we all seem to agree), what should be changed?
Also, each provided service should definitely have its own contract and fee.
Don’t get me wrong here, i just don’t want to see NU Lagoon become like a “cancer” in NU system.

#12

With or without quotation marks I consider “cancer” too harsh.
Let me try to phrase it that way: with more and more Nu funded operations, NuLagoon should try to adertise its service transparently to convince the NSR holders they can receive services from NuLagoon, which are worth their money (keeping the sides balanced tightly would be a killer service!)

At the moment it’s more or less a black hole consuming close to 5k NBT each month and delivering a service some might call questionable and a volume at 2 exchanges, which doesn’t seem to match the monthly costs.

I’m not willing to analyze that on my mobile phone, but the last times I looked at hitBTC I could find no orders within the ALP/MLP compliant spread.
Maybe someone wants to have a look at the order books and the broadcast liquidity from time to time.
One remark about hitBTC: there are funds on sell side from my gateway (one approx. 500 US-NBT at 1.5% offset and one at a little bit bigger offset (500 something NBT) due to the paramtric order book).

1 Like
#13

Can we discus the improvement and regulation of the operation of NuLagoon Pools. What will make you comfortable to pay NuLagoon?

  1. The minimum sizes of fund should be provided at each exchanges? Related to the proportion of the NuLagoon Pool or the average trading volume of the exchange?

  2. The maximum spread could be set at exchanges?

  3. The maximum service down time would be accepted?

  4. How the operation should be reported to make NuLagoon transaparent?

  5. Is the new fund-locked pool needed? In what time?

  6. Change in the way fee grant?

  7. Penalty rules?

We gonna answer these questions ourselves in first. Just for discussion.

  1. 40k for Tube, 30k for Polo, 10k for Hit

  2. <=1%

  3. <=1% total time and <=2 times per month

  4. Besides COB accounting report, a monthly operation report in detail should be provided. Something like this
    [Passed] {Grant Failed, Please Vote on The New Addr Again} The Nu Lagoon Custodian Fee Request of Feb 2016

  5. NuLagoon should set up the new pool in 2 weeks.

  6. NuLagoon will be payed by FLOT every 3 month.

a)Terms except 4 and 5 should effective immediately.
b)Triple of the Fee will be subtracted for the service down time. For example, the service down for 1 day, 3 days of fee will be subtracted from the payment to NuLagoon.
c)NuLagoon Fee will be cut a half to 83NBT/day until term 4 and 5 fulfilled.

We would like to hear your opinions.

Thanks.
Henry

2 Likes
#14

I want to change the imperative from Shareholders have to constantly pay NuLagoon or risk losing credibility toward a model where NuLagoon has to pass a budget or risk losing funding. With FLOT paying for NuLagoon’s funding, you no longer have to worry about passing a grant each month. Great, that means you can consolidate your efforts into passing a new contract proposal every 3 months. Make it a 1 NBT grant proposal just to make sure you always have a custodial address on hand.

You don’t have to fix everything at once. In each 3 month contract list the basic things you’re doing regularly and goals for that 3 month period. Reassess each time you have to bring up a new contract and remind us of all the great stuff you’ve done and plan to do.

No more endless contracts.

@henry If the OP specified $150/day, would you be ok with it?

1 Like
#15

I will comment on the rest later, but didn’t want to wait with commenting this point.
I don’t see a reason for 30k at Poloniex or 10k at hitBTC at a tight spread, except for moving Nu funds to successful hedgers.
I’d rather see 6k at Poloniex (3k each side) and 2k at hitBTC (1k each side), but with a frequent balancing of the sides.
ALPv2 with CRFC might make it hard for NuLagoon to exceed their efficiency.
If ALPv2 fails (although I don’t know why) like ALP in times when it was most needed, providing guaranteed liquidity will be an important feature.

40k for the Tube is ok or can even be increased.
But I doubt that this all is worth close to 5k per month.
Let’s wait what else comes on the wish list and what the NSR holders’ decision will be.

1 Like
#16

We would like to clarify that establishing a long-term business relationship between NuShareholders and us is crucial to us. Because most of our service is customized for NuBits. Only with a long-term prospective, we are comfortable to invest our effort into building infrastructures of NuLagoon services. Therefore, except there is clear evidence shows that Nu do not need the services of NuLagoon in three months, we prefer not putting a preset end-day in the contract. Your understanding is really appreciated.

However, surely, the terms of the contract could be re-evaluated and negotiated. We are open-minded to Nushareholders’ opinions. Let’s discuss how to improve NuLagoon and Nubits together.

While the discussion is continue, we have already done a few things.

  1. Built a monitor tools to guard NuBot. Restart NuBot if it doesn’t work. Most of the issues that we see NuLagoon’s buy/sell walls disappeared or froze regardless of the BTC price moving should be solved now. Please give us some feedback if NuLagoon’s buy/sell walls are more reliable now.

  2. We moved physically and purchased some very good network resources. Now we can connect to this forum more easily and stably. So we can be more responsive to the community from now on.

We are look forward to hearing your suggestions.
Thanks.
Henry

5 Likes
#17

Updated the OP to contain 2 motions. Both slightly lower the compensation of NuLagoon, both shift payment responsibilities from shareholders to FLOT. One is a 3 month contract, the other is indefinite.

1 Like
#18

Looks good!
FLOT paying NuLagoon makes it easier for NSR holders - supposing they vote for the motion - and renewing (and maybe negotiating the terms of) the NuLagoon contract after 3 months makes sense in an environment that rapidly changes.
I’m damn sure that the contract will be continued, as long as NuLagoon provides valuable service!

1 Like
#19

We really want to keep the long-term contract, while be open-minded to negotiate terms with Nushareholders. Please take our responce into consideration. Thank you.

1 Like
#20

I changed nearly everything in the OP.