This is a very interesting discussion and one that I want to participate since I have been dealing with those walls full time for one year now.
TL;DR; I agree we should agree on a min-max spread range and force custodians to use that.
Whatever the outcome of this motion will be, I will reflect it in the default parameter used locally by nubot and on the push streaming service.
I think that great part of this discussion is not new and there is some “reinvent the wheel going on” in this thread.
I am not sure we ever had a written contract/rule/motion anywhere obliging custodians to use a specific spread. Its about time we find an agreement on this and I am glad you came up with a proposition. So far spread has always been exposed as configuration parameter from 0.1.4 in NuBot ( I am not sure how it works in the TLLP) and several times custodian changed it to see market reactions. The default spread in nubot is 0.4%, aka 0.2% per side (plus the exchange TX fee, which changes depending on the exchange) .
While I am well aware of the spread problem, I believe the solution cannot be imposing an arbitrary large spread alone. Rather it should be a dynamic market-aware spread (planned in a few iterations of nubot) combined with liquidity distributed around a central price rather than single walls.
That’s not actually true. We are now testing now 0.3.1 and 0.3.2 will come shortly after, most of the work is already there. Anyway, regardless the fact that we have the parametric order book in place, this does not affect your motion about imposing a boundary bid/ask spread. So in this sense this motion is very welcome.
Re OP : your reasoning is correct when you say that we have high cost of maintenance. I find it a bit flawed when you make a comparison with the orderbook of LTC at a random instant of time taking only the top bid/ask. One of the points of NuBits is providing liquidity in a way other coins cannot provide, resulting in outstanding market velocity. Please see some interventions here and here where @JordanLee calls for nubits as an “intermediary coin” thanks to its liquidity operation, along with all my opposition and final outcome. So really, the LTC comparison doesn’t help much the discussion imho.
We deal with three kinds of pairs, grouped by volatility level
NBT/USD (0 volatility)
NBT/FIAT (little volatility)
NBT/CRYPTO (high volatility)
Please specify boundaries for each specific case.
When you say guaranteed tolerance do you mean the bid/spread ask? Or are you saying that sell orders should be placed at the crypto equivalent of 1$+0.07$ and buys at 1$-0.07$ ? In the latter case, its more an offset expressed in $ from target price rather than the traditional bid/ask spread of orderbooks. Wording is important in motions, please edit.
How do you measure the bid/ask spread in percentage btw? In different codes/docs I’ve found at least three different ways to compute the spread and the result is different.
let bestbid be the price of the highest bid and bestask the price of the lowest ask.
spread1= |(bestbid/bestask) -1| * 100
spread2= |(bestask/bestbid) -1| * 100
spread3= (|bestask-bestbid|) / (((bestask+bestbid)/2)/100)
Beside some adjustment to the text of the motion, I think the rest looks good.
Also, please take into account that while I think that setting gross boundaries for the spread is a good idea, the next step is to make the spread dynamic, aka, market-aware.
Comments on other replies
So @masterOfDisaster is also proposing a maximum spread for compensation. Is this clear in your motion?
c) in the early stage of a product custodian and the network had to pay a price to comply with the “always 1$” promise rather than “more or less 1$”.
Also here I am getting a bit lost. I am not even sure who is developing what. We had long discussion on price feed/averages/tolerances/sync across exchanges, custodians, etc. Hours have been spent in design and development in this regard. Last time I spoke with creon I told him that we were about to roll out a “push” service that suggests prices to bot (and spreads soon). It is being tested as I type actually, and I strongly believe that TTLP clients should consume this service and be advised on prices (and spreads later). Did someone else took over development of pools? Whoever is working on it, can please make sure that we don’t make (wrong) things twice? This is also at the expense of shareholders.