[Passed] LiquidBits term 4 grant - Automatic Liquidity Pool (ALP)

NuShares Passed Grants
#21

So you agree that we can print/issue our own profit here - the operator fee

#22

Profit per year per nushare = (current share price - share price 1 year ago) + Sum{ dividend / number of shares distributed to }

Anything else is peg maintenance, development, marketing, yada yada. Assuming a peg that is not currently in danger of breaking, the number of NBT in existence and how it is changing has no bearing at all on our total profit. Note that we can manipulate this at will by performing a share buyback, but then we may enter the disclaimer of the peg being in danger.

#23

OK - I suspect that your definition of profit, that you want to apply to Nu and claim as legit, is different from say BCEx’s, let alone from any standard industrial company out there - considering that Nu acts as a central bank.

#24

That’s the reason why this profit calculation seems appropriate. Nu acts as a central, but in fact is a decentralized “central” bank.

It’s just confusing because Nu started differently with custodians acting with Nu’s money.
Had Nu started with decentralized liquidity operation, each sold NBT would’ve needed to be distributed as PPC dividend, other dividend (BKS) or used for NSR buy back.
Where else would you like to keep the profit without generating external counter party risk?

As long as no NBT need to be bought back, it’s more profit. If NBT need to be bought back, it’s less profit (because NSR might need to be granted and sold to get the NBT and burn them).

In the end it’s the difference of the value of Nu (including dividends) that measures the profit.
Destroyed NBT for tx fees help getting to a higher profit. But in the end it’s the sold NBT that account for profit.
It took some time until I wanted to realize that, because it looks just too easy.

And in fact it isn’t.
The hard part is getting NBT sold without people wanting to sell them back to Nu.
NBT need to be useful and secure in order to keep the desire for selling them back small.

ALP are a good example of giving NBT a use case.
Making them more popular for payment is another thing. NuDroid might help here a big deal.
Proof-of-Park and so many other application hopefully follow.

Even if Nu hopes to get many NBT out - in the end Nu needs to be able to buy each and every NBT back. That’s the basis for the trust people hopefully have in Nu.
Everything else needs to built upon this trust.

2 Likes
#25

Nope, same calculation for BCEx or any peershare implementation. The same calculation can be applied to BTC, just assume dividends = 0 and you get that the normalized profit is equal to the price difference which kinda goes without saying.

#26

This explanation to me makes much sense.
I appreciate it.

“As long as no NBT need to be bought back, it’s more profit. If NBT need to be bought back, it’s less profit”
“But in the end it’s the sold NBT that account for profit.”

OK, now since the buy side < sell side, it is as if we are not selling one single NBT that we have not bought back, hence we are in the red.

Additional costs: we are paying LPCs to entertain the trust that we can buy all NBT back from traders.

Use case - any difference between LiquidBits ALPs and say NuLagoon?

1 Like
#27

Just a very brief summary as this is not really the thread to discuss this:

From a Shareholder perspective the key difference is that the ALP are unmanaged and unbalanced. This is the sole responsibility of the users participating. They have control over their own funds at all times. Incentives can only be given by adjusting rates on certain pairs and sides.

NuLagoon is managed. The users trust their funds with NuLagoon management (like a fund agent) and they are able to move the liquidity around and balance it across pairs and sides where and when they think that is appropriate. The users can only withdraw or add funds twice a week currently.

1 Like
#28

3c3d0382f0939d035c0a251ae1fe905972af302f verified

voted

#29

Good parameters for LPs on these pairs are:

NBT/BTC:
Deviation = 0.0025
Offset = 0.0045
Resultant Spread After Fees (SAF) = 0.898%

NBT/EUR:
Deviation = 0.0015
Offset = 0.0055
Resultant SAF = 0.7%

NBT/USD:
Deviation = 0.00005
Offset = 0.00745
Resultant SAF = 1.09%

#30

After re-study of “http://cybnate.github.io/index-liquidbits.html”, voted

#31

I always like to point out that Bitcoin was around $500 when many of us purchased NSR, and Peercoin was around $2.00. If we assume that the valuations of most cryptocurrencies are tied to Bitcoin’s performance, NSR has strongly outperformed the broader cryptocurrency market. BTC is down 50% since then, PPC is down about 80%, and NSR has been flat.

2 Likes
#32

This passed.

1 Like
#33
#34

Will load the new parameters to the server in the next 24 hours.

Bitcoin.co.id will be removed from the list as they are no longer supporting the NBT/BTC pair by 15 September. The last liquidity on this pair has been removed in the last few days so this should not create any problem.

Please note that additional liquidity can be added to the USD/NBT pair on CCEDK after the update.

#35

LiquidBits is down. Having issues with server.py after pull requests:

Traceback (most recent call last):
File “/home/cybnate/nu-pool/python/server.py”, line 809, in
Unhandled exception in thread started by <bound method ThreadingServer.serve_forever of <main.ThreadingServer instance at 0x7faf529473f8>>
Traceback (most recent call last):
File “/usr/lib/python2.7/SocketServer.py”, line 236, in serve_forever
poll_interval)
File “/usr/lib/python2.7/SocketServer.py”, line 155, in _eintr_retry
return func(*args)
File “/usr/lib/python2.7/SocketServer.py”, line 455, in fileno
return self.socket.fileno()
File “/usr/lib/python2.7/socket.py”, line 224, in meth
submit(nud)
return getattr(self._sock,name)(*args)
File “/usr/lib/python2.7/socket.py”, line 170, in _dummy
raise error(EBADF, ‘Bad file descriptor’)
socket.error: [Errno 9] Bad file descriptor
File “/home/cybnate/nu-pool/python/server.py”, line 628, in submit
config._pool_name)
AttributeError: ‘module’ object has no attribute '_pool_name’
Exception in thread Thread-26 (most likely raised during interpreter shutdown):Unhandled exception in thread started by
sys.excepthook is missing
lost sys.stderr

Traceback (most recent call last):
File “/usr/lib/python2.7/threading.py”, line 810, in __bootstrap_inner
File “/home/cybnate/nu-pool/python/server.py”, line 245, in run
<type ‘exceptions.AttributeError’>: ‘NoneType’ object has no attribute ‘exc_info’

Trying to find what is going on…

#36

Back up and running, forgot to update the pool identifier. My bad.
Will have a manual payout today.

2 Likes
#37

Manual payout just sent. Thanks for your patience and apologies for the short interruption of the service.

3 Likes
#38

Yes - this is interesting. Any good reason?

#39

@tomjoad Just noticed that the liquidity page: https://nubits.com/liquidity-pools still shows that LiquidBits is supporting bitcoin.co.id, with this grant passing and since 15 September that is no longer the case. Could you please remove that reference? Thanks.

1 Like
#40

Will do. Updating that page is on my list of priorities. I would like to divide the page into ALP’s and MLP’s, and simply link the ALP section to https://raw.nupool.net/nubits/. It doesn’t make much sense for me to continually manually update information that @willy and @woolly_sammoth are already tracking accurately. I may have time to complete this later this evening.