TL;DR
How much is the value of a flawless track record of the peg?
And how supportive is the dual side NuBot on Poloniex to keep that track record flawless (at what cost)?
I fear, both are questions that can only be answered by gut feeling.
My gut feeling tells me, it’s worth it.
The peg is of paramount importance for the perception of the quality of (US-)NBT (and the products that will come!).
With a flawless track record people look at NBT and say “Wow, it worked so far, impressive!”.
With one single peg failure the tenor may shift to “It already failed once…”.
That’s the reason why I worked my ass off in the recent past - the peg must be kept!
/TL;DR
Long read
NSR holders need to feel uncomfortable having funds on an exchange.
But NSR holders should feel uncomfortable with an endangered peg as well.
The good and the bad thing is: the major trading volume and the main focus is on Poloniex:
70% - 90% NBT trading volume was on Poloniex in the recent months.
I don’t see immediate need for dual side NuBots on other exchanges. Maybe gateways, but no dual side bots.
It was for that reason I created the gateways at Poloniex: whether we like it or not (in terms of relying heavily on one exchange): Poloniex is the most important exchange for Nu.
The ALP showed that it doesn’t react fast and flexible enough to support the peg sufficiently if Bitcoin is in rollercoaster mode. Without the gateways, the peg might have been lost.
From the experience I made with the gateways, I’m inclined to suppose that a lot, or even the majority of trades on the NBT/BTC pair is done by bots.
The pace slowed significantly down once the “cheap” orders were bought.
But Nu shouldn’t rely on dealing only with pro traders, who stop their buys or sells if the wall is emptied, to ensure the peg.
A buffer of approximately $10,000 on each side would help a big deal.
If the buffer is starting to get consumed, or rather shifted to one side, the dual side bot can be funded to support the drained side just like the gateways are currently being provided with funds: deposit them and let NuBot put them on order.
To add some background info to this topic I digged in an old thread that dealt with the liquidity operation of KTm and jmiller.
I found out that
jmiller managed funds of in total 228,798 NBT:
on several exchanges and
ktm managed funds of in total 1,023,038 NBT
Of course not all of the funds were on exchange - far from it!
And several exchanges were supported by the two (not only Poloniex).
Yet a lot of money (one and a quarter million!) was in “single point of failure” situations.
While it wouldn’t have hurt much to simply lose NBT forever (given they would be lost unrecoverably - like burned), losing proceeds from NBT sales would have hurt, did hurt.
That was a lesson learned from the February exchange defaults.
Yet, that’s exactly what the dual side NuBot will create again: a single point if failure.
But for a total of a few thousand USD.
