[Passed] Grant to provide liquidity using NuBot on hitBTC - the begin of modPuddle

[Nagalim]

I’m against operator fees for MLPs that do not offer services to everyone. MoD is proposing a personal pool and getting rewarded for it, despite whether those funds belong to MoD or MoD’s close friends. Let’s not add extra complexity by paying MoD twice for the same operation.

[willy]

Yes, he is getting money from two separate people, but his pool is not publicly accessible like NuLagoon is. That’s what I understand as requirement to name yourself a “pool” in this community.

I just skimmed through the Custodial Grant Passed section before April 15
https://discuss.nubits.com/c/nushares/custodial-grant-passed

and didn’t find a single custodian requesting an operator fee so far.

[desrever]

I just skimmed through the Custodial Grant Passed section before April 15

what about 1MIL NSR JL was paying? Wasn’t that an operation fee?

[willy]

I understand this as custodial fee.

[desrever]

It’s probably a matter of language… What exactly is the difference between custodial fee and operation fee?

In case of JL’s reward that was a bonus to inspire and elicit liquidity providers to step up. In my case I used my own funds therefore I wasn’t “custodial” of somebody else’s money, so I’d call that reward more like “operation”.

[mhps]

I just skimmed through the Custodial Grant Passed section before April 15https://discuss.nubits.com/c/nushares/custodial-grant-passed

499 NBT here
1 MIL NSR here
10,000 NBT here
…

I understand this as custodial fee.

That is just a matter of words. Operators fee has always been there.

complexity

Now we just are decomposing the fee, whatever it is called, into opportunity cost, risk compensations, and cost of time etc., to bring transparency to the fee structure. Untransparent things are not necessarily less complex. They are just more difficult to understand.

[willy]

. Operators fee has always been there.

That exact term came with the tllps and they were supposed to cover server cost, maintenance, user support… Everything else was considered custodial fee.

Everything is a matter of words!

[mhps]

That exact term came with the tllps and they were supposed to cover server cost, maintenance, user support… Everything else was considered custodial fee.

It’s good to nail down exact meaning of terminologies. Since many LPCs rented VPS to run nubot, do you agree that the custodial fee they asked also included or would have included fund to cover server cost and maintenance ?

[willy]

Yes, for me those costs are included in the item "custodial fee."
I am with nagalim here, I suppose the costs mentioned are included in the 15% per month custodial fee.
I feel like there is a good premium compared to our current ALP rates.

…But still, I think the proposal is acceptable how it is.

[masterOfDisaster]

I thought what moD proposed here is a single custodian liquidity provision
[…]
What would he be operating anyhow despite NuBot on a RPi?

Towards Nu I will act as single custodian.
In the background I need to manage the funds of two people.
I will be operating NuBot, contributing to testing NuBot, gathering experience, being able to guide others who want to start a similar operation and providing liquidity on that way.

Let’s not add extra complexity

That was one of my reasons to provide a simple cost model: X NBT fee for Y liquidity. Compensation rate X/Y.

That’s what I understand as requirement to name yourself a “pool” in this community.

Then I refrain from calling it pool. Btw. where did I call it pool?

what about 1MIL NSR JL was paying? Wasn’t that an operation fee?

That was an operation fee or whatever you might call it for providing liquidity with funds provided by Nu. The funds here will be provided - following the decentralization of liquidity providing - privately. The full risk of exchange defaults will be on the shoulders of those who provide Nu with the liquidity.
I will get some money from those whose funds I use for running NuBot. But this is a matter of business between me and them. Towards Nu I offer $1,500 liquidity at 225 NBT per 30 days.

Maybe I’d even do it without that compensation, just because I’m interested in getting experience with operating NuBot in a production environment.
I envision a future (next 1 or 2 months) in which several NuBots will compete (with each other and ALP) for fixed compensation at exchanges. I want to be able to play a role in that game - if only to help people set up and run NuBot.

I feel like there is a good premium compared to our current ALP rates.

Simply undercut my offer or wait for others do it and make me lower the rates or retire from this business
Until that happens, my offer is the best available.
I’m willing to adjust the parameters to some extent, if it’s the prevailing view that it won’t pass with these parameters.

[willy]

where did I call it pool?

You didn’t, I thought mhps referred to your project as a MLP.

My offer is the best available

I never doubted this.

[desrever]

That was an operation fee or whatever you might call it for providing liquidity with funds provided by Nu.

Nope, that was an encouragement to provide own funds to the operation. I did one myself!

I envision a future (next 1 or 2 months) in which several NuBots will compete (with each other and ALP) for fixed compensation at exchanges.

I have a different vision on NuBot vs ALP, and I just submitted my plan to JL. But this is off topic.

[mhps]

That was one of my reasons to provide a simple cost model: X NBT fee for Y liquidity. Compensation rate X/Y.

That simplification is masking hightened exchange risk to liquidity providers. As a shareholder I don’t think Nu should conduct its business transparently, for its own good.

@masterOfDisaster
where did I call it pool?

You didn’t, I thought mhps referred to your project as a MLP.

It’s an MLP in my book. Whether the fund providers are known community members is irrelevant. Is there any guarantee how many of the exisitng MLP and ALP providers are community members? Nu is going to benefit from the fund and the fund should be compensated rationally. The rational way is breaking compensation down and put a cost rule on every component.

[Nagalim]

My issue has to do with private vrs public operations. For private operations, Nu shouldn’t really care so much about the cost to set up because the private pool owns funds by default. It’s still an MLP, but it’s a private MLP, so it should figure out its cost and reward structure internally. It’s not really Nu’s business to know how the compensation is broken down in a private MLP.

[mhps]

My issue has to do with private vrs public operations.

Nu shouldn’t even burnden itself distinguishing/guessing who is private. Liquidity has cost to Nu, which Nu should find out. Nu pays whoever providing liquidity at a cost Nu wants. That is all. It’s a free market view, instead of mafia view.

[cryptog]

Amount Requested: 225 NBT

So to sum it up, you are asking this amount for how much liquidity every day rewarded at which rate?

[masterOfDisaster]

Like stated in the proposal: 225 NBT for 1,500 NBT liquidity.

The amount of liquidity isn’t guaranteed over the duration of the term; it’s the amount of liquidity the operation will start with and it may rise or fall together with BTC rates.

Operation will start with equal distribution of the 1,500 NBT total liquidity funds between buy and sell side (750 NBT sell side, X BTC buy side depending on the BTC rate at the time of start).

At least each Wednesday (possibly more often, but not guaranteed) inter pool balancing of the buy and sell side will be done by me.

Condition for balancing is one side is below 45% of total volume.
Inter pool balancing means I will transfer funds from the side with more than 55% to another exchange or other exchanges, trade funds and send the change back. I tend to prefer exchanges where the funds I want to get rid of are available in excess, but won’t guarantee that. I might not have an account at a particular exchange or might not find any exchange that meets the condition (because the side could be unbalanced (liquidity) network wide).

If seeded auctions are available, trading funds there to balance walls might be considered.

[masterOfDisaster]

Imagine you had money on your hitBTC account and received this when visiting them…
…just sayin’

https://discuss.nubits.com/uploads/default/optimized/2X/7/7674dd15e63180deefc1721412a9973aeedebf5f_1_690x371.png

[cryptog]

Bid Reward Rate: 0.5%/day (not paid in advance)
Ask Reward Rate: 0.5%/day (not paid in advance)

It is actually 0.5%/day total over both sides, otherwise it d mean 1%/day which amounts to 30%/month, in which case you would ask for 450NBT as a reward. Can you confirm?

[Nagalim]

Percentages are linear. 0.5% of a and 0.5% of b when b + a = c (c is some constant) has cost of 0.5% of c, not 1% of c.