The introduction of trustless liquidity pools has been a very important development in our liquidity operations. However, this method of providing liquidity should not be used as our only form of liquidity. The reason for this is that pools based on @Creon’s software can only provide tier 1 liquidity, which is high risk and high cost. To lower the overall cost of liquidity, we need most of it to be in tier 3 multisig addresses and below, where it will be safe from exchange defaults that have been so devastating. There has been money waiting for this service to be offered and muchogusto has in the past pledged to place 25,000 NBT in such a pool.
What I would like to see in the coming months is the TLLP pools providing most of the tier 1 liquidity, with multisig pools similar in design to NuLagoon providing tier 3 liquidity. Long term a concentration of liquidity will be placed on B&C Exchange. The escrow potential of B&C Exchange can be utilized to reward liquidity providers for locking their funds to ensure they will provide liquidity for a specific period of time. So, long term, I expect TLLP to provide tier 1 liquidity with a concentration of that on B&C Exchange, while the pools that meet the conditions below and resemble NuLagoon will also have a large presence on B&C but will also be able to commit to locking some of their pool funds on B&C for tier 1 liquidity for an extended period. Note that on B&C Exchange the difference in the safety of funds in tier 1 versus tier 3 is minimized. This will permit Nu to make statements such as “we can guarantee at least 250,000 NBT in liquidity will be provided over the next 90 days.” This will be possible because B&C Exchange signers will not release the funds used for liquidity during the contract period.
So, these NuLagoon style pools have an important role to play in present and future liquidity operations. They will allow for individuals who don’t want to be involved in daily liquidity operations such as @muchogusto to contribute and benefit and will also permit liquidity to be guaranteed for a certain period of time in the future.
I would like to point out that @henry at NuLagoon has pioneered a pool architecture that provides buy side support while completely eliminating BTC volatility in the form of pool C. Additionally, he has created pool D which permits leveraged speculation on Bitcoin with an added 13% return per month. The pool architectures pioneered by @henry have tremendous potential to provide cheap and user friendly liquidity, but need to employ multisig addresses to reach their full potential, in my opinion. Providing incentive to use multisig addresses for these types of pools is the primary purpose of this motion.
Motion RIPEMD160 hash: 806780895db71afc8302e59cd65765a35e598fc8
=##=##=##=##=##=## Motion hash starts with this line ##=##=##=##=##=##=
A reward of 500 NBT via custodial grant will be given to the operator of liquidity pool that meets the following conditions:
- Uses at least 2 of 3 multisignature Bitcoin and NuBit addresses for managing off exchange user funds.
- At least 75% of funds are held off exchange in the multisig addresses as tier 3 liquidity.
- Does not require pool users to run any software regularly to provide liquidity.
- Rebalances tier 1 and tier 3 liquidity at least 3 times per week. For instance, if a pool keeps 15% to 25% of all funds in tier 1 on an exchange, then three times a week the ratio would be examined and funds moved to adjust the percentage if it fell outside the 15% to 25% zone.
- Reports tier 3 liquidity (buy and sell side) at least once a week.
- Meets above conditions for 30 days with the intent of continuing to do so indefinitely.
=##=##=##=##=##=## Motion hash ends with this line ##=##=##=##=##=##=
Verify. Use everything between and including the <motionhash></motionhash> tags.
I welcome comments and suggestions for changes to the draft version of the motion.