[Passed] Accessible Liquidity - Encompassing NuLagoon Contract

[Nagalim]

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.

[Nagalim]

I also added this:

##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.

[henry]

Avoiding T3/T4 management

We are not saying that we gonna stop using the Tube in T3/T4 management. This feature is useful and necessary.

We just want to emphysis the Tube is much more than that, We need to atrract more Nubits users, especially new users. The Tube should do more work in this area. It would be better to avoid deterioate the feature of the Tube in supporting Nu end-users.

Thanks.

[Nagalim]

I dont think this deteriorates the tube. You can still keep 40k liquidity there, it will just be that if NuLagoon needs T4 balancing it will show up in the tube rather than on exchange. So the only potential degredation of Tube service proposed by this grant would be that flot takes on responsibility for balancing the tube. I think FLOT has shown that it is up to this task. Do you think that FLOT will not be responsive enough to keep the tube balanced? I think they will respond with similar speed as NuLagoon itself, which is to say a balancing might take a couple days to notice the discrepancy and sign a txn.

[cryptog]

any conclusion?

[Nagalim]

Im hoping NuLagoon will propose their own motion, using mine as an influence. Otherwise, maybe a little more feedback wouldnt go amiss. Is there support for hashing this?

[henry]

Im hoping NuLagoon will propose their own motion

In general, we think that what is outlined in this motion does make sense. We would like to try to do so in terms of reporting and balancing liquidity accroding to Alix panel before the motion is formally passed and effective. In this way, we will be more clear how the motion would impact the NuLagoon’s operation.

Thank you.

[Nagalim]

@henry updated. No mention to ALix was made as that introduces ALix as an attack vector on NuLagoon.

[willy]

Please elaborate?

[Nagalim]

The way this motion is written, NuLagoon is responsible for ensuring liquidity on a supported pair, whether it’s their liquidity or not. Clearly, ALix is a great way to measure this. However, I feel like if ALix is mentioned specifically it will become the end goal rather than the actual exchanges.

As an extreme example, say ALix is down or compromised. What happens to the NuLagoon contract? Do I have to put in clauses about how to determine if ALix is compromised or not? Instead, we can just say what we want (liquidity on actual exchanges within 1.5% of the price feed) and let the usage of tools like ALix be implied.

[henry]

Can I ask what should Alix do if NuLagoon report the Tube liquidity to T3, instead of T1? How will this affect the measures of balancing and the actions should be took? Thank you.

[Nagalim]

With the update, this motion is written with Tube as T1. This motion will not really affect NuLagoon operation directly other than requiring a monthly report and switching to FLOT for payments (and slightly reduced but fixed daily compensation).

[henry]

this motion is written with Tube as T1

Sorry, I didn’t notice that update. I guess I have no more questions now.

[Nagalim]

I have put this up for voting.

[henry]

Thank you Nagalim. We will vote for this motion.

We have an idea to promote Nubits, will post on another thread to share with Nushareholders.

[Cybnate]

Supporting this. Will add this to my datafeed.

[cryptog]

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.

So this motion mandates to pay NuLagoon a daily fee of 150 USD/day as long as the liquidity is properly offered by NuLagoon and as long at it is not overridden by another motion.
Basically it makes NuLagoon a full time employee of Nu.

[Nagalim]

Basically it makes NuLagoon a full time employee of Nu.

Yup. But then, it basically already was. This motion actually reduces the cost of NuLagoon.

[cryptog]

reduces the cost of NuLagoon.

just a few hundred nbts , compared to previous months, it seems.
by the way, this motion can be overridden later of course.

[Nagalim]

Yes, just a 5% reduction or so practically speaking.

The motion was written to allow for easy modification in the future. The per day rate and the requirement of FLOT to wait 10 days after each monthly report gives shareholders time and flexibility to do near anything with the NuLagoon contract going forward. Assuming widespread shareholder consensus on a plan of action, of course.