over the last weeks Nu was busy bringing NBT to market to satisfy an increased demand. Selling them from T4 or T6 to T1-3 to hold the peg was a tough mission, which was accomplished due to the help of so many.
Thank you for that!
Especially during the mid of calendar week 47 there has been serious demand, emptied sell walls on Poloniex even with danger for the peg.
The FLOT is being formed and hopefully will make some things easier and more reliable.
Fixed cost compensation for liquidity providing will increase the incentive for liquidity providers to buy NBT from Nu if the sell walls start to run dry and aid the liquidity situation.
Poloniex is at the moment the exchange with the highest liquidity and volume for trading NBT. I might dislike the fact that so much depends on Poloniex, but that doesn’t change the fact.
Measures to strengthen other exchanges are not subject of this post, though.
This post shall deal with a possible answer to the question: how to bring NBT to market efficiently?
Last week I created an NBT entry gateway to allow injecting NBT into market without manual intervention from my side. I don’t want to repeat all of [Concept] NBT entry and exit gateways here, but highly recommend reading that post to develop an understanding of what I’m going to propose.
If Nu needs to bring NBT to market, it can either deal with individuals who buy NBT and pay with BTC, which can be a cumbersome and slow process.
This proposal makes use of custodians who provide Nu with NBT entry gateways. The custodians run NuBots on an exchange (e.g. Poloniex) in a mode that only sells available NBT, but doesn’t place BTC on the buy side. NBT get exchanged for BTC and the custodian transfers them on a regular basis to the T4 buy side reserve.
An obvious drawback is that funds that are owned by Nu are temporarily in the hands of custodians. They are prone to theft, loss and exchange default - just to name a few risks.
In difference to the liquidity operations of the custodians @KTm and @jmiller who started providing liquidity with funds owned by Nu, this custodianship poses only a temporary risk for Nu’s funds. And this risk only needs to be taken if other methods to sell NBT fail or are too slow to fill the demand for NBT.
Proposal RIPEMD160 hash: ceb2e883a7706d3ba0e8ff4a5caec088b50e8b82
=##=##=##=##=##=## Custodian Hash starts with this line ##=##=##=##=##=##=
Custodial Address: BETwD8nSjtj9ADSvej2na34xmsMYwPRymv
Amount Requested: 1 NBT
@masterOfDisaster - below called “the operator” - will operate a NuBot on the exchange mentioned below. The liquidity is being broadcast using the custodial address to allow tracking the liquidity situation of the bot. If the gateway function is required Nu (FSRT, FLOT) sends NBT to the exchange account deposit address. The NBT get sold and the earned BTC are not put into orders, but get transferred to a Nu address (T4 buy side) on a regular basis.
The process of selling NBT can be tracked with the
The operator charges no fee for this entry gateway, but offers no guarantee for anything - neither the availability of NuBot nor malfunctions of NuBot nor outages of the internet access nor the funds on the exchange. The operator promises to send all (remaining) NBT and traded BTC to Nu (FSRT, FLOT) on a regular basis or burn the NBT. The operator won’t take any of the funds or trade them.
=##=##=##=##=##=## Custodian Hash ends with this line ##=##=##=##=##=##=
Verify. Use everything between and including the <custodianhash></custodianhash> tags.
This type of gateway can be used to remove NBT from the market, by turning the NuBot operation upside down and making it place only buy side orders, selling BTC for NBT. I’m going to draft a grant for that as well, because I feel the buy side might benefit from having such a tool. Loosing the peg in the other direction would be even worse.
If Nu is close to releasing other products, this type of gateway might be very helpful as the demand for new products can hardly be estimated before. This gateway is basically unlimited in its capabilities of bringing Nu products to market. Only withdrawing the proceeds might take some time depending on withdrawal limits.
I highly encourage others to do the same - provide NuBots as entry and exit gateways. The more NuBots, the better the availability and the less money in the hands of a single custodian. Please don’t get shied away from my operator fee of 0 NBT. I think this can be a service of certain value for Nu and NSR holders should seriously consider voting for grants from other people who charge a fee.
After all it impacts the usability of the exchange account, requires some efforts, but most of all it’s valuable for Nu!
I just though it’s important to get the ball rolling, to have this means of peg defence. I’m not interested in earning money with it, but want to help keeping the peg intact.
Famous last words
For emergencies two NuBots stand ready on Poloniex - one sell side only, one buy side only, each operating on the same exchange account, but with individual API credentials.
They can be used to defend the peg in either side if all else fails. @JordanLee and @FSRT have been informed how to use them.
I crated this draft to authorize using custodians and their bots as gateway formally.
I’m interested in reading your comments.
And once again the recommendation to read the whole thread [Concept] NBT entry and exit gateways - some questions you might already be answered there
NBT address to fund account (this was the NBT entry gateway / sell side, but is no longer; it’s now dual side!):
BTC address to fund account:
as the FLOT has started its operation, addresses controlled by JordanLee or FSRT will no longer be used to withdraw funds from the gateway.
Any funds that are sent to this address will be converted to BTC by NuBot and the proceeds will be withdrawn to a FLOT T4 BTC address. NBT funds that are not yet converted might be withdrawn to a FLOT T4 NBT address.