To support the analysis of theories around liquidity provision, I’d like to propose a dual side gateway operation at hitBTC.
The sell side only operation, which might be replaced by this dual side gateway, was rarely used.
Only a few NBT have been traded.
The offset of 1.5% was not attractive enough (combined with not offering a buy side operation) OR there was simply only little activity.
The question whether a tight peg is bad for liquidity providers, because it can draw money from them
@muchogusto has made an offer to anaylze that on Poloniex.
If we have a similar test going on at e.g. hitBTC, the informative value will be increased by that.
So I decided to make a proposal for running a Nu funded NuBot at hitBTC that replaces the current sell side only operation.
The account is currently at 1,995 NBT and $4.34 in BTC
I know and I understand it in parts.
I just want to keep the burden for shareholders low.
It’s not endless. FLOT or shareholders can end it.
1% is the max. spread in this proposal.
I’d dare reducing it far below that to gather data about the NAV in a highly liquid low spread environment.
The spread is one of the reasons why I want to sre more discussion before I promote this to voting.
I’m aiming at a SAF (and not only a spread) of below 1%.
The offsets I propose are 0.004 for both sides.
As that’s no part of the motion, it can be discussed later.
The predominant opinion seems to be that a smaller spread should be favoured. I’m including a lower limit of 0.5% for the spread to avoid buying/selling into the NuLagoon operation at hitBTC.
I’m aware that the API can’t be accessed by NuBot at the moment due to certificate issues. But I hope that will be fixed soon. If it’s not fixed soon, I’m suggesting to withdraw the funds from the exchange account to FLOT.