I will provide the compensation request for the last modPuddle term here as soon as @assistant is awake.
NSR holders might want to review the compensation for this liquidity operation.
Doing so they should keep in mind that while the compensation per USD is quite high I otherwise charge no (operator) fee.
For a total liquidity of 1,500 USD the compensation is 225 NBT, which is 15%. This “cost of liquidity providing per USD liquidity” is not much different from other small ALP.
From a technical view the term was great (again).
No NuBot outages needed to be fixed.
This term was financially speaking a good term and it resulted in a NAV of close to 1,700 USD (1011.21 NBT = 1011.21 USD; 1.61 BTC * 417 USD/BTC = 671.37 USD; total 1682.58 USD). The volatility losses of the previous month are mostly compensated by this term.
Here’s the grant request:
Proposal RIPEMD160 hash: 51c50149ec0182e469150e575328130e2e9eb047
=##=##=##=##=##=## Custodian Hash starts with this line ##=##=##=##=##=##=
Custodial Address: BJEERhCvKzSvGrgYVbhV8XcgZhP4i8SwGe
Amount Requested: 225 NBT
Strategy: Moderate Peg
Spread After Fees: 1%
Liquidity volume: 1,500 NBT
Bid target volume: 50%
Ask target volume: 50%
Balancing bid/ask: at least each Wednesday
Balancing goal: each side between 45% and 55% of volume
Bid Reward Rate: 0.5%/day (pay back for 2015-11-11 to 2015-12-11)
Ask Reward Rate: 0.5%/day (pay back for 2015-11-11 to 2015-12-11)
Duration: 30 days
Operator Fee: 0 NBT
Total Grant: 225 NBT
Rollover from term 1 grant : 0 NBT
Requested compensation: 225 NBT
=##=##=##=##=##=## Custodian Hash ends with this line ##=##=##=##=##=##=
Verify. Use everything between and including the <custodianhash></custodianhash> tags.
Just to inform the Shareholders. The compensation on an ALP is 0.24 on average on BTC/NBT pair. 0.24 x 30d = 7.2% (excluding operator fee). I understand that ModPuddle’s contract guarantees the liquidity at ‘all times’ whereas ALP Liquidity Providers can withdraw at any time they wish. So basically an insurance premium for funds in T1.
Maybe we should keep this fund in tier 3 instead to reduce the exchange risk and reduce the costs of this kind of liquidity? Interested in your thoughts.
If you add up the operator fee to the costs of these ALP, it doesn’t look much different for the net rate of other small operations (which modPuddle is, albeit MLP).
You are right about the insurance aspect. This is a concept which I expect to be replaced by fixed cost compensation. I don’t think I will continue modPuddle once there’s an ALP at hitBTC with fixed cost compensation.
I agree that modPuddle is very useful for hitBTC provision until nubot alp comes out.
Good to support the grant for HitBTC until we have new ALP software released and stable.
Just to be clear: this draft is for the back pay of the last 30 days (2015-11-11 to 2015-12-11).
modPuddle is working like NuLagoon: providing liquidity first, requesting compensation later.
The NSR holders are obliged to vote for this grant as soon as it’s put up for voting!
If NSR holders indicate this service is no longer needed, I’m going to stop it.
I think a motion is an appropriate way to tell that.
Another option would be to turn it around and require a grant in advance.
I’d be fine with both. I just thought it would be fair to only request a grant after I’ve provided the service; I could - in opposition to the terms - get cold feet and pull the funds from hitBTC.
In that case NSR holders could reflect that in the grant very easily.
The only reason for me to pull the funds would be information about hitBTC being in trouble, close to defaulting and I doubt that I could ever know that before it actually would happen.
BTC volatility on the other hand is no reason for me to stop modPuddle. I started a term 2 even though I hadn’t even created a term 1 grant (let alone having received the compensation; but how could I - not having asked for a grant?) and had to fill the funds with 240 NBT (losses due to volatility and hedging) from my own pockets.
You see I’m taking liquidity providing seriously
Please don’t Good to support at least 1 another term or not raise a motion against it as you wish.
I’m willing to support hitBTC with modPuddle as long as necessary or as long as NSR holders approve it, respectively.
But I think contracts like this require continuous review.
That was all I wanted to indicate.
I don’t want to come across as someone bribing NSR holders after having provided an unwanted service.
After the asistant replied to my request, I’ve put up the grant for voting.
I intend to adjust the conditions of the next term.
- I’d like to change from balancing “at least each Wednesday” to “at least once a week”
- I want to introduce a threshold for the balancing to kick in.
Are there any objections?
If not I’d like to start the next term with a grant for 1 NBT. The back pay will be done afterwards like so far.
Will add this to my feed within next 48 hours.