[Passed] Continued NuPond Operation

NuShares Passed Grants
#1

NuPond has been run quasi-continuously for over 30 days on the btc pair, and has made a beginning attempt at providing continuous liquidity on the new cny pair. Support, however, has been around 1000 NBT total when the bot wasn’t acting up. The current balances of the two accounts at the time of this writing are:
NBT/BTC: 63.3547 NBT
NBT/CNY: 305.5121 NBT

As you can see, I have hardly spent anything, in fact I have put some of my own money in. Because of this, I will be asking for higher rewards on both pools, with as much as 3x the reward on the cny pool. This should go a long way toward stimulating more support for these pairs.

Another change I would like to make is to adjust the targets to reflect reality more. A larger buy side on cny and a larger sell side on btc will provide a more complete understanding of what’s expected of the custodian.

I intend on complying with [the spread motion][1] whether or not it passes, unless another motion provides similar guidelines.

Because of all this, and because this is the first time I am asking for a personal fee to be paid, I offer this proposal up first as a draft.

Please also vote for this address so I can run both pools on nupond.net:

Custodial Address: BAt6MK2WEy2xzZbERe858kyDPahB1vLcVY
Amount Requested: 1 NBT

Proposal RIPEMD160 hash: 475bfe184b77d133608d7574623b0c0b73335351

=##=##=##=##=##=## Custodian Hash starts with this line ##=##=##=##=##=##=

Custodial Address: BPLdB3cUa6RupfbDL1Xuh7QDAmbtoXyFNh
Amount Requested: 781 NBT

@Nagalim will continue to provide support for the trustless liquidity pools on Bter.com. The pools will have the following parameters:

NBT/BTC:Ask Target = 750 NBT ; Bid Target = 250 NBT |Reward = 0.33%/day |Tolerance = 1% (0.7% offset)

NBT/CNYAsk Target = 5,000 NBT ; Bid Target = 15,000 NBT |Reward = 0.15%/day |Tolerance = 0.6% (0.4% offset)

150 NBT will be used for operator fees now, and another 150 NBT will be owed by future grants 30 days after passage of this grant. These pools will operate until funds are exhausted or another motion takes precedence.

The provisioning of the pool is based on best endeavors. No claims can be made by users when the pool server software is not available. Exchange failure or loss of funds caused by exchange operations is the risk of the liquidity provider.

=##=##=##=##=##=## Custodian Hash ends with this line ##=##=##=##=##=##=

Verify. Use everything between and including the <custodianhash></custodianhash> tags.
1 Like
[Discontinued] Cybnate's Nu datafeed - BETA
[suspended] Cryptog's Nu data feeds - BETA
[suspended] Cryptog's Nu data feeds - BETA
[suspended] Cryptog's Nu data feeds - BETA
[Discontinued] Cybnate's Nu datafeed - BETA
[suspended] Cryptog's Nu data feeds - BETA
#2

I think it is all-right to increase the rewards as you are operating on an exchange which is not trusted as much it used to be due to the recent hackings and loss of funds by some people.

I’m not sure about the large offset and the relatively high reward on the NBT/BTC pair. I believe the exchange transaction fees are very low at BTER. Therefore I would expect a lower reward given the high offset.

Same with the NBT/CNY pair, why the high 0.4% offset when the reward is already been paid by the Shareholders. I do know that the number of transactions is also low on BTER, so the benefit from offset might be small.

I understand that you intend to trial the large offsets but in general I’m not sure if that is the way to go in combination with Shareholder rewards at this level. Maybe a currently low velocity exchange as BTER can be the exception.

Will be interesting to hear what others think about this.

#3

0.2% in that 0.4% is exchange fee. Personally if we set anything below twice the exchange fee we’d be getting the short end of the stick, but that’s just me.

In generally a higher spread is used to mitigate volatility risk; we don’t want give arbitrage opportunities when prices move suddenly, and for speculators who want to make bets we want to make sure that even if liquidity providers are occasionally on the losing side they won’t lose a lot of money.

If volatility risk proves to be small with a higher spread it makes a very good case to reduce payout while keeping liquidity levels, saving money for shareholders.

For reference you can look at the spread of CNY/HKD offered by HSBC Hong Kong. HKD is very firmly pegged to USD and Hong Kong is the largest trading center for CNY that is not governed under mainland China currency regulations.

And an outlet as large as HSBC Hong Kong offers an overall spread of over 1.4% for CNY/HKD. HSBC China offers an overall 1.0% spread against USD. I don’t think 0.4% (0.8%-0.9% overall spread) is unreasonably large.

aaaa.png1036×852 102 KB

As for the NBT/BTC pair, people do lose money to arbitrage and BTC turbulence for lower spreads despite the high payout. That said I’m not against @nagalim lowering rewards; this can be an interesting competition with NuPool, which has a less than enthusiastic approach towards the offset.

#4

My point is that no one pays for bringing liquidity with HKD. I’m fine with large® spreads, but I’m not sure whether Shareholders should also pay a relatively large bonus on top of it unless other risks need to be taken into account (e.g. exchange failure). It is in the Shareholders’ best interest to have a small spread to improve trading. I’m prepared to pay for small spreads, not for another bonus for large spreads when no other large risks exist.

1 Like
#5

There seems to be an extent of centralized management of CNY liquidity in Hong Kong markets. There must be a cost or a price for that; either banks pay for the liquidity or the government subsidizes in hope of improved economic activity involving CNY. The main point though, was that 1.4% overall spread isn’t considered bad even for many offline merchants.

Anyway I encourage lowered fees for NuPond and I’m sure even with reduced fees some people who were burnt by low-spread TLLP settings will gravitate towards that. Not by too much for now, perhaps back to the earlier days of TLLP with say 0.25% per day.

#6

@Cybnate I’m the only one stating my tolerances. My new btc tolerance is only %0.15 higher than what it used to be. The cny tolerance needed to be enlarged because it was causing bugs in pybot. This is in line with a motion that is currently at 35% support. I think you’ll find most of these numbers are actually quite reasonable compared to what we are running.

For instance, my CNY tolerance (0.006) will lower than your USD tolerance (0.007), and my reward is still less. So what do you mean big spread? Mine’s lower than yours.

Maybe I should just pass the motion without mentioning tolerance like all the other pools are doing. Then I can just do whatever I want.

#7

We might have to agree on the definition off tolerance, offset and spreads first. I don’t know how they relate to the software.
To me the offset between buy and sell is to cover the exchange rates. A 0.2% exchange rate results in a 0.2% offset. Any deviation from that to the upside should be communicated as it would likely decrease the fees the Shareholders are prepared to pay and vote for.

Maybe it is best to clarify what you offer to the Shareholders with a practical example as I think there are only a handful of people who understand every line of code of the software and how that relate to tolerances, spreads, offsets and other settings and they are probably not really interested in it as long as it delivers what has been contracted. TLP is already complicated, it needs simplification not complication for its marketing. Having said that I do agree that the spreads for a pool should be stated in a pool operator’s motion.

It is great that you experimenting with settings in the software and adjusting the software itself and with that exposing potential flaws and issues. So from that perspective and given its small scale I’m happy to support your motion assuming your spread covers just the exchange costs. Just keep the balance between Shareholder’s interest and LPC’s interests and we will be fine. And yes, there will be market swings were the appetite of one of the parties is higher than the other causing rates and spreads to move and that is fine as long as we all understand it.

Keep it simple and clear, I’m not a developer or financial expert, although I’m learning fast given some time.

#8

‘Tolerance’ is a parameter in config.py that is called when the server is run. It defines the window of acceptance for orders for the client. It does not exist in the non-tllp world, it is the umbrella of creditable orders.

‘Offset’ is a parameter in trading.py that is called when the client is run. It defines the actual difference between buy and sell orders that the client places. (except offset is actually named ‘spread’ in the code itself.)

‘Deviation’ is also a parameter in trading.py, called by the client. It defines how far the price can drift before the orders are moved.

‘Spread’ is a colloquial term = 2 * offset. It is what people ultimately want to talk about, you want it to equal the exchange fees.

Offset + Deviation < Tolerance must be true to have the bot run at 100% efficiency. Deviation should be between 0.2 and 0.3%. That means your ‘price’ is drifting by more than what you’re trying to peg, which means one tllp provider could regularly have a buy order up at higher than market price. With a tolerance of 0.7%, like you set on your server, one could easily run an offset of 0.49% and a deviation of 0.2%.

If we want competition to blossom, we shouldn’t be cracking down on something that we don’t even have the practical means of cracking down on. It just seems like we’re shooting ourself in the foot trying to get such tiny little offsets that aren’t even practical in an effort to seem convenient to btc shorters.

TL:DR
%0.2 offset is impractical from even a technical perspective, never mind a financial one. If our liquidity providers wise up technically, they will take advantage of this. If they don’t, they will lose money until they are driven away.

#9

I did my best to reflect appropriate changes to the code here:

For some reason the .conf files other than pool.conf in the windows directory do not open properly on windows notepad.

These files won’t work until I switch my domain over, but if you change the ‘nupond.net’ to 45.55.228.61 they should work just fine.

#10

I have put this proposal up for voting.
I do not think my proposed parameters deviate drastically from current pools. My btc rate is the same as Cybnate’s, my cny rate is lower than all other tllp. My targets are non-conventional, it’s true, but we are still a long way from filling them. My cny tolerance is still the lowest of any tllp pool and my btc tolerance is within 20% of Sam’s pool.

1 Like
#11
#12

Voted. I think it’s unrealistic to expect the network to land on an optimal set of parameters for pools before we reach our target liquidity rates ($100,000+). Voting for imperfect or evolving proposals is desirable compared to not voting at all, if only to foster more competition.

Overall, I appreciate the effort @Nagalim is putting in to creating a service that is transparent to shareholders, and just as importantly, helping to boost our popularity on the only Chinese Exchange (BTER) we have. Nice job.

3 Likes
#13

475bfe184b77d133608d7574623b0c0b73335351 verified and voted.

The efforts to expand the liquidity on NBT/fiat pairs and to allow a larger spread on NBT/BTC are very worthy, I believe.

#14

Hey, I’m sorry about this, but can y’all also make a second address custodial for me? It’s because I made a new server and I want to run 2 server.py instances, so I need 2 custodial addresses. Anyway, it would really help me out.

Custodial Address: BAt6MK2WEy2xzZbERe858kyDPahB1vLcVY
Amount Requested: 1 NBT

1 Like
#15

I am fine with granting another custodial address.

#16

Can you explain what this means in non-technical terms?

#17

I want separate pools for btc and cny for technical reasons. Therefore I need two custodial addresses to submit liquidity properly (or my cny pool will overwrite my btc submitions and vice versa). I could rework the code so this isn’t necessary, but Sam doesn’t want to put too much work into revamping it if we’re just gonna use a different thing anyway.

This allows me to run both pools out of nupond.net (using different ports).

1 Like
#18

Thanks for the explanation. You should put the second custodial address in the main body of the OP to ensure everyone sees it.

1 Like
#19

If we’re just trying to generate trade volume, keep the large spreads and get an active pair like BTC/CNY and peg both sides of it with a large spread. Then, let people arbitrage that pair off the peg feed using our liquidity. We get double the volume, they get to play a safe bet, and really the people that lose are the people pushing the local pair out of equilibrium with our feeds.
This totally goes along with what @masterOfDisaster was saying about channeling btc funds to fiat, we could also be the arbitragers.

#20

Someone is voting on the hash for this grant. Thank you very very much for your support, but hashes are for motions. All you have to do to support this is perform a custodian vote for the requested amounts at the two addresses:

Custodial Address: BAt6MK2WEy2xzZbERe858kyDPahB1vLcVY
Amount Requested: 1 NBT
and
Custodial Address: BPLdB3cUa6RupfbDL1Xuh7QDAmbtoXyFNh
Amount Requested: 781 NBT

2 Likes