[Passed] Dual side gateway at hitBTC by masterOfDisaster

[masterOfDisaster]

Motion hash: c178a7fcd6941ae8845bdd286eef3130460eaab3

Continuing the discussion from [Activated at 2016-03-023] sell side gateway at hitBTC by masterOfDisaster:

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

Lack of commitment to liquidity is our biggest threat now

My opinion is that tight spreads can be a loss-leader if we have a proper platform to collect fees by offering loans and derivatives. Without that it’s a money losing business.

It is an important question whether arbitrageurs are draining value from the liquidity providers. I doubt this is occurring. Muchogusto’s experiment is giving us interesting data on this

was raised.

@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

        "1:NBTBTC:hitbtc:0.4.1_1463249805072_2f0e73" : {
            "buy" : 0.0,
            "sell" : 500.0
--
        "2:NBTBTC:hitbtc:0.4.1_1463249805072_2f0e73" : {
            "buy" : 4.34,
            "sell" : 1495.693

Details like the spread (maybe with a shift between sell side and buy side offset?) should be discussed here.

Copy from Daology:

###Intro

@masterOfDisaster - below called “the operator” - will operate a NuBot on the exchange mentioned below. The liquidity is being broadcast using a custodial address to allow tracking the liquidity situation of the bot. If the gateway needs funding, Nu (FSRT, FLOT, JordanLee, etc.) sends NBT or BTC to the exchange account deposit address. The NBT or BTC are used for a dual side operation.

The status of the orders can be tracked with the getliquiditydetails RPC.

Disclaimer

The operator charges a low fee for this dual side gateway, but offers no guarantee for anything - neither the availability of NuBot nor malfunctions of NuBot nor outages of the internet access nor the funds on the exchange.
The operator promises to send all Nu owned NBT and BTC to Nu (FSRT, FLOT) upon request.
The operator is not responsible for tracking the funding level of the gateway.
One balancing per week is included in the operator fee, which needs to be requested by FLOT. If a side runs dry, but no balancing is intended, deposits to the weak side may be made.

The operator won’t take any of the funds or trade them.
Nobody except Nu representatives should send NBT or BTC to the gateway as all funds on the account will solely be sent to Nu addresses.
Funds that have been put on the exchange account by the operator for testing/monitoring purposes before the contract starts, are excluded from this rule.

Parameters

• Operator: @masterOfDisaster
• Type: NuBot
• Exchange: hitBTC.com
• NBT deposit address: BQuc7rf5NTbcCQ4zonjBSPq5gBFw4ibUYH
• BTC deposit address: 1G1dDsJciNxs5NrKdKVD5kLi6tHoerQY3T
• Pair: NBT/BTC
• Mode: dual side
• Spread: 0.5% spread < 1%; details to be negotiated; the lower limit is to avoid collisions
• Duration: 30 days, automatically extended by 30 days until withdrawal of all funds has been requested by authorized entity (NSR holder motion, FLOT majority in the respective group)
• Liquidity broadcast address: BETwD8nSjtj9ADSvej2na34xmsMYwPRymv as long as it’s valid, B9gXptkoqAApF3AFrQyhUbhSzvuEudxupt thereafter
• Operator Fee: 50 NBT

Activation of the gateway / starting the contract

Operation starts the day a Nu representative group or person (JordanLee, FLOT, FSRT) deposits funds at the deposit address or the motion passes

Impact for other motions or contracts

If this contract gets activated, the sell side gateway at hitBTC by masterOfDisaster gets replaced by this operation.

[Cybnate]

Like the proposal and spread of 1% is fine.
Just don’t like the automatic endless extensions and FLOT payments as discussed earlier.

[zoro]

Just to be clear, spread 1% means offset 0.005 in each wall, right?

[masterOfDisaster]

Just don’t like the automatic endless extensions and FLOT payments as discussed earlier.

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.

spread 1% means offset 0.005 in each wall, right?

Right.
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.

[masterOfDisaster]

Any more feedback?
Recommendations for the offsets (they can be negotiated later, though; the <1%spread will stay)?
If not, I’ll promote it to [Voting] soon.

[cryptog]

I am fine with the proposal.

[masterOfDisaster]

With the fees structure of hitBTC

Trading fees

An order which will not be executed immediately will be granted a 0.01% rebate on execution.
Orders executed immediately will incur a 0.1% execution fee.

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.

[cryptog]

Sorry for the delay.

c178a7fcd6941ae8845bdd286eef3130460eaab3

Voted.

[crypto_coiner]

Will add probably this to my voting data feed – when my wallet has completed the DL

[masterOfDisaster]

No need to hurry. NuBot is currently not able to operate at hitBTC due to certificate issues.
But thank you for the support!

[cryptog]

Passed but sadly mod is not active any more .

[Cybnate]

Passed but sadly mod is not active any more

I can run the infra if it is still required. Won’t see that happening in the short term. Chances are that we will be delisted soon.