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

[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.

[masterOfDisaster]

@Nagalim beat me to it.
0.5% is correct.
Both buy side and sell side funds will be rewarded with that compensation (assuming this grant passes with current parameters).
The operation will start with $1,500 NBT (in total).
So the total compensation will be 0.005/day * 1,500 NBT = 7.5 NBT/day or 225 NBT for the 30 days (7.5 NBT/day * 30 day).
I’m not sure how other operations handle that, but I don’t intend to track the value of the funds over the term.
The 0.5% will apply to the initially deposited funds worth 1,500 NBT.

I’s a kind of fixed cost approach as the cost (and compensation) per time will stay the same no matter what happens to the actual value of the funds.

The major difference to (fixed cost) ALPs is that no funds will enter or leave the operation.

With this single operation Nu can’t find out what minimum compensation liquidity providers demand for providing service at this particular exchange.
That requires competing liquidity operations of which ALP would be suited best to determine the compensation rate for this exchange and trading pair.

[Nagalim]

This is fixed reward. Fixed cost would be something like Nu passes a motion stating they will give 225 nbt away to the MLP that can provide the best (most trustworthy, cheapest, most) liquidity. It’s a subtle difference and not really applicable here. MLP competition is still not something we have figured out properly yet.

[masterOfDisaster]

I agree that it’s a subtle difference between reward and cost.
Reward is rather from the LP perspective, cost is rather from Nu perspective.

I think in this case here the cost is fixed, but not the reward.
If 50% of the funds were in the buy side and BTC dropped by 50% of its value in an instant, the reward (in percent) for the provided liquidity would increase, but the cost for Nu did stay the same.

something like Nu passes a motion stating they will give 225 nbt away to the MLP that can provide the best (most trustworthy, cheapest, most) liquidity

Right. It’s a step into that direction. For the next term there might be another NuBot operator trying to get a share of the 225 NBT (or all of them) if he can undercut the current offer.
Or an ALP operator is stepping up to provide liquidity.
I believe it’s in the best interest of Nu not only having different exchanges with supported liquidity operations, but independent liquidity operations at each of these exchanges as well.
It reduces the risk of LP failure and increases the availability of liquidity.

I imagine a future in which Nu will provide X NBT (or NSR) per exchange it intends to have liquidity provided and the liquidity providers make offers. The best offers will be accepted.
That way Nu gets the best service for the money.

[Nagalim]

I think in this case here the cost is fixed, but not the reward.If 50% of the funds were in the buy side and BTC dropped by 50% of its value at an instant, the reward (in percent) for the liquidity would increase, but the cost for Nu did stay the same.

This is a good point as to why your MLP is fixed cost and NuLagoon is fixed reward. NuLagoon promises Nu a certain rate for liquidity below $5,000 per month. DisasterPool promises liquidity provision of a variable nature at a fixed cost of 225 nbt/month, then challenges other MLPs to step up if they think they can compete.

[masterOfDisaster]

DisasterPool promises liquidity provision of a variable nature at a fixed cost of 225 nbt/month, then challenges other MLPs to step up if they think they can compete.

DisasterPool, lol!
As much as I expect other LPs to make competing offers for hitBTC, other pools should expect me making competing offers for exchanges they are operating on if only I have some experience and can obtain more funds to provide liquidity with
Needless to say that the fixed cost concept (for ALPs) played a role in all this.
I don’t think fixed cost needs to be limited to ALPs, but can be applied to providing liquidity in general.

[mhps]

With this single operation Nu can’t find out what minimum compensation liquidity providers demand for providing service at this particular exchange.

That requires competing liquidity operations of which ALP would be suited best to determine the compensation rate for this exchange and trading pair.

That is what is supposed to go on even the concept of fixed cost pool isn’t there. The shareholders have been seeking a better deal, all the time. That said this “fixed cost per term” is conceptually new and might cause the price to be discovered faster because the shareholders have only one ratio – cost/liquidity – to track instead of two – interest and target.

I do hope a fixed cost ALP can be offered so price discovery can happen in like ~10 min.

[masterOfDisaster]

Is there demand for substantial change? If not I’m going to change this topic from
[Draft] Motion to provide liquidity using NuBot on hitBTC
to
[Voting] Grant to provide liquidity using NuBot on hitBTC
quite soon.

I think I need to change it from “motion” to “grant”, because I require a NBT address for broadcasting liquidity information.

[Nagalim]

You gotta start somewhere, do it up. You will indeed need to make it a 1 NBT grant.

[masterOfDisaster]

bump.
changed from [Draft] to [Voting] and from “motion” to “grant”. More information in the last edit of the OP.
As soon as NuBot 0.3.2 is released and this grant as passed, I will fund hitBTC and start NuBot on hitBTC.
The funds for that are already under my control

[Nagalim]

the total grant is still 225, of which you are requesting 1 NBT now. But w/e.

[masterOfDisaster]

You are right, but I didn’t want to confuse with contradicting numbers.
I have some belief that shareholders will continue to pay for the services they receive the way it was agreed - otherwise I wouldn’t offer full payment after the service

[tomjoad]

[cryptog]

So you would request the payment of 225 NBT once the service has been delivered?

[Cybnate]

I have some belief that shareholders will continue to pay for the services they receive the way it was agreed - otherwise I wouldn’t offer full payment after the service

You are probably right, but your grant details don’t make that clear. Technically there is no obligation resulting from this custodial grant. I think you should have mentioned it as part of you verifiable grant text. But hey, we all make mistakes from time to time. Even I do ([Passed] LiquidBits term 5 grant - Automatic Liquidity Pool (ALP)) so I will support your grant.

[masterOfDisaster]

So you would request the payment of 225 NBT once the service has been delivered?

Yes.

I think you should have mentioned it as part of you verifiable grant text.

This is my first attempt in this field.
But while I planned to remove contradicting numbers from the grant, the
Liquidity volume: 1,500 NBT together with the
Ask/ Bid Reward Rate: 0.5%/day and the 30 days operation can be used to calculate the 225 NBT.

The only way to really make sure, the money is paid, is by requesting a grant (and waiting for it to pass) before the operation starts.
That’s not the route I chose.
If I provide liquidity and don’t get compensated I’ll have to explain something to the guys who provide the funds, but I’ll survive that. Before I talked with them about earning money by providing liquidity, the coins were sitting idle in wallets.
I’d consider it a lessons learned session, but don’t expect to learn this lesson here and soon.

[cryptog]

42a734a54664547d04f4cb5c292f30730451a55d verified and

Custodial Address: BBZ4h88BwYCyE9q268LoArps6eodq9PDGH
Amount Requested: 1 NBT

voted

[masterOfDisaster]

I was thinking of a fancy name.
So far every liquidity provider picked one.
@Nagalim had a nice idea:

DisasterPool promises liquidity provision

Although I find it funny, it might send the wrong signal.
But it inspired me to think about something at least remotely funny, because I heard Sunny King.

I ended up with modPuddle.
Reading it is less funny than saying it

[willy]

modPuddle

Puddle of mod? https://en.wikipedia.org/wiki/Puddle_of_Mudd