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.
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.
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.
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).
Can we discus the improvement and regulation of the operation of NuLagoon Pools. What will make you comfortable to pay NuLagoon?
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?
The maximum spread could be set at exchanges?
The maximum service down time would be accepted?
How the operation should be reported to make NuLagoon transaparent?
Is the new fund-locked pool needed? In what time?
Change in the way fee grant?
Penalty rules?
We gonna answer these questions ourselves in first. Just for discussion.
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.
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?
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.
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.
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.
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
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.
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!
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.
Agree on that same price feed is important. Can Alix provide a recommendation of order of BTC price feeds, so can easily bring all LPs to the same page.
Does that mean the minimum spread NuLagoon could set is 1.5%?
How about the situation of multiple LPs (including NuLagoon) supporting one exchange. Should the goal of NuLagoon be set to balance overall buy/sell sides on the exchange or to balance its own buy/sell sides?
We tend to treat the Tube as an exchange. Because the fund there could be immediately accessed by Nu users, don’t you think it’s more reasonalbe to report the values as Tier 1 liquidity?
This is unneccessary. You will get paid sooner if you submit the report sooner. If you fail to submit a report you won’t get paid and shareholders have plenty of time to pass a motion to respond to perceived performance.
Overall. This would be a direct pivot of contract from previous NuLagoon iterations. Instead of being concerned with dozens of arbitrary parameters and functions, focus on making sure the actual buy/sell on exchange stays within ±1.5% of the price feed with reasonable liquidity.
Having some funds at larger spread is fine, but those should be considered T2. Basically, providing extra market pressure at higher spreads can cause the market to respond positively. So in the long term any action that aids in keeping the peg should be accessible and even reportable by NuLagoon.
This motion subtly changes the function of the Tube. It will now be used primarily as an access point for Nu FLOT funds (though it’s basic function of trades off-exchange will be unchanged). Therefore it should not be balanced like a network trading pair and should instead give FLOT indication of NuLagoon’s off-exchange funds. The tube is off-exchange (T3) because exchange default and operator default are one and the same in the tube.
For example, according to this motion if NuLagoon made a private manual trade with flot, that would still be considered a ‘tube’ transaction. This is because the two instances are degenerate, the only difference is whether we are using automated software or not. In either case the price must be agreed upon, which is why if FLOT believes the tube prices are being manipulated they can stop paying NuLagoon - allowing an accessible access point for network liquidity to trickle down all the way from the top tier to the bottom tier is a vital part of how NuLagoon should function.
Still not sure about your exact meaning. The fund on the Tube comes from NuLagoon Pools. Are you talking about placing FLOT’s fund on Tube’s buy/sell liquidity wall?
Can you explain more about the default risk of Tube?
So for the Tube the only thing shareholders care about is when FLOT sends funds to the tube to make a trade. In this case, the risk that Tube operators take the money and run with it is the same risk that operators will break NuLagoon contract, i.e. they are the same operation with the same funding and perceived trust level. This is as opposed to trading on a third party exchange where shareholders are trusting both the operator and the exchange not to run away with the funds. That’s why I call it T3, there is less risk for the funds to be lost because there are less parties being trusted.
Correct. So if the walls on NuLagoonTube act as something of a barometer for network balance, FLOT can interact indirectly with the network by making trades through the Tube. For example, say poloniex has $6k buy side without NuLagoon. NuLagoon also happens to have mostly buy side liquidity (say $40k buy and $20k sell) because the network is out of balance. Now NuLagoon puts up $10k sell and $4k buy on poloniex to get the walls up to a healthy $10k each. NuLagoon knows that it is now very buy heavy but does not want to reflect that on poloniex because it would throw off the pool balance. So instead it reflects this asymmetry in the Tube. Let’s say NuLagoon keeps $5k buy and sell off the tube for insurance purposes or whatever. So the tube would reveal $31k buy and $5k sell. FLOT would now be able to see that and respond directly by signing a txn to balance the tube without NuLagoon’s interaction at all.
What’s more, by adjusting the money held off the tube and off exchange, NuLagoon can control the funds on the Tube entirely. So if NuLagoon wants to short BTC, they can request for it by emptying the BTC side of the tube. This is fine in my opinion, but it highlights why having a responsible Tube price feed with low spread and fees for FLOT is extremely important. It’s because in the Tube if FLOT is obligated to refill NuLagoon is not the ‘house’, Nu is, yet NuLagoon is still claiming the trade advantage by using a spread.
We are afraid that we are not big fans of this idea. If we understand correctly, it seems like that the Tube will be treated as a secondary liquidity support for traditional exchanges like Polo. In some situation, unbalance the Tube to balance Polo? Won’t this harm Tube’s major role as a direct support to Nu 's peg.?
We still tend to think the Tube is an innovative exchange customized for the support of Nu’s peg. At this exchange, the peg never will broken. The point we are trying to make is that although the Tube could contribute to the T3/T4 management, sometimes make their life easier, however, the most valuable part of the Tube is to support Nu end-users directly.
We are also planning to imporve the Tube for new NuBits users as an easier way to acquire their first NBT.
Thank you.
All T1-3 strategies require a method by which they interact with T4. So please answer this question:
How does NuLagoon interact with FLOT?
Because recently the answer to that question has solely been the Tube. Avoiding T3/T4 management is the same thing as avoiding a change in circulating nubit supply. How can NuLagoon operate as our #1 biggest liquidity expense without interacting with the circulating nubit supply at all? It cannot. That is why FLOT has had to resort to balancing the tube. That is why it is an important part of this contract. If you are not comfortable with that, offer an alternative. However, a T3 strategy for FLOT interaction is important and, in my opinion, mandatory for a long term operation (a year of operation is already long term in this world).
As another perspective:
If you market NuLagoon as never breaking the peg and I buy all your nbt, what do you do to get more? Do you go break the peg somewhere else? No, instead, FLOT balances it for you. FLOT gets grants from shareholders. Nu is ultimately the reason why the Tube doesn’t break peg.
##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.