[Passed] NuPond operation on Bter's NBT/CNY pair

[Nagalim]

Proposal RIPEMD160 hash: 1381ae23c3686167e8fc86ed185fe2539106a5d9

=##=##=##=##=##=## Custodian Hash starts with this line ##=##=##=##=##=##=

Custodial Address: B8K2wj2i7JTSgSo73P74qvBETy4kpfp6UX
Amount Requested: 300 NBT

@Nagalim will start a second trustless liquidity pool on Bter.com called NuPond.net to provide liquidity for the NBT/CNY market. A target of 10,000 NBT on the bid and ask side of the order books will be provided by the pool and compensated via dutch auction at a maximum rate of %0.05/day resulting in a total maximum liquidity of 20,000 NBT. The operation will end after thirty (30) days for a maximum compensation of %1.5. The compensated spread will be no more than 0.25% to either side of the market price for USD/CNY.

300 NBT will be held as a retainer for payments to liquidity providers, paid daily with balances >1 NBT and a manual distribution at the end of operation. The operator fee will be 100 NBT, to be paid in a subsequent grant. At the end of operation the pool will be maintained until the remaining funds are exhausted or another motion takes precedence.

The provisioning of the pool is based on best endeavors. No claims can be made by users when the pool server software is not available. Exchange failure or loss of funds caused by exchange operations is the risk of the liquidity provider.

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Verify. Use everything between and including the <custodianhash></custodianhash> tags.

[wengone]

I believe CNY needs is very large, it is recommended that the maximum 10000NBT

[Nagalim]

This is a brand new pair. You want 10,000 NBT buy and sell side? That’s 20,000 NBT total liquidity. I am uncomfortable asking for a very large grant on such a new operation especially when we have so many other pools this month (Nu-pool asked for a rather big grant recently).

I’ve doubled the liquidity and halved the reward. I would be happy to do that again if you like.

Edit: I doubled the grant amount to double the liquidity one more time. I agree that NBT/CNY is important and I want to show Bter that. The total possible liquidity is 16,000 NBT at 1.5%/month, and Bter can provide as much of that as they want if they simply run the bot pointed at my server once I have it up and running.

One more of an endless round of edits: I want to increase my fee, but felt like it endangered the grant from passing by asking in advance. I increased the liquidity to the full 20k NBT @wengone asked for and am pushing back operator payment until after the 30 days. This allows me to keep the grant low at 300 NBT.

[creon]

This is a good proposal. Many people already have CNY on BTER and there are many markets with liquidity available to exchange to or from CNY. 10,000 NBT on each side sounds like a good first run to me.

Also, even if nobody made use of this so far, remember that if we see that we hit the buy side target and all this is very successful, then you can just ask for a second grant during the operation in order to increase the target. Its a bit more tricky doing the math afterwards, but in general this can be done.

[cryptog]

We definitively need to develop the liquidity provision market on NBT/FIAT pairs.
This draft would be an important step toward that goal, starting with CNY, which is the most liquid FIAT currency in the crypto world.

[Nagalim]

Ok, we are up and running at:
NuPond.net:3333
Remember to switch your pool.conf to use cny as the exchange unit.

And for a limited time, the pool allows the standard huge spread of more than .7%! Volumes are capped at 500 NBT for now. I’ve been putting some liquidity up for a couple days, and I can tell you, this is a great deal for liquidity providers. So if you’re a shareholder and you’re thinking to yourself “this seems like a good deal for shareholders” you should not hesitate to vote.

Use my latest pull (switch unit to cny) if your bot isn’t placing orders:

Nagalim/alp-collection

[Nagalim]

Few voters, no pool participants. Did I mention I’m processing payouts?

Is there no interest in this operation? If so, I would like to withdraw funds, destroy the server, and point my nupond.net domain to the custodial grant that was supported.

[masterOfDisaster]

I guess most people didn’t realize that the pool was running before the voting was through…
It just got my attention right now.

[Nagalim]

You can use a bigger spread if you like, just for the testing round. I really don’t want to deplete all my participant’s buy side liquidity until the motion passes. To use a bigger spread, go into trading.py and search for the ‘spread’ parameter, then increase it to at least 0.0006. If you downloaded my cny branch for nupool, you should be able to increase it all the way to 0.0008 before you have any issues. This will, of course, be tightened up to 0.2% if the proposal passes (if I recall, the promised trading fee was 0.1%, so extra profit for liquidity providers on the spread).

I tested the tightening of the spread already, by the way. I shouldn’t have any problems adhering to the spread of 0.25% proposed. The maximum order deviation should be 0.05%, which gives us our resulting operating spread of 0.2%. You can feel free to try to decrease the maximum deviation, I know I was getting rejects down around 0.01%.
The reason this number can be so small is because we’re using a fiat pair. And not only that, we’re using cny, which is pegged to USD, i.e. nbt. This is a beautiful market, money to be made for everyone. All we need is to convince people to provide trade volume, and allowing people to profit off of liquidity operations with bots they themselves can design is a very enticing way to get people involved. We need proper marketing here.

I can decrease the reward of the bot to 0.001% if we need more time for this proposal, or whatever, but this operation is powerful, cheap, effective, and useful. I think that if people take it seriously, it will fill up with nbt sell side immediately. Then, people will generate trade volume to get to the cny side because of the previously discussed hot potato phenomenon caused by the dutch auction with a preferred side. This trade volume will attract customers with cny. Money will barely siphon off to hedgers via arbitrage, but mostly offset the costs of liquidity providing. The exchange also takes a chunk, but Bter has also said good things about providing liquidity themselves which would be very beneficial toward all of this, of course.

[mhps]

Is there no interest in this operation?

The reason that I haven’t used are -

I am losing track of which pools are offering what pairs on which exchange.

I would like to see an instruction page applicable to the pool, even it is generic instruction so I am sure what to do. Edit the OP to point to the instruction if you have to.

I don’t use bter unless I really have to.

[Nagalim]

instruction page

I have made an attempt at this, but do not feel comfortable publishing it yet. I will invite any to view it who wish to see.

[Nagalim]

By coincidence, I have to do a server restart for just this server for security upgrades. I’m going to drop the payout to 0.01%/day and increase target to the full 10,000.

Hm, it didn’t replace my orders, I had to do a client restart to get it working properly again. I’ll have to look into that.

[masterOfDisaster]

I’ve started a test run 14 hours ago.
Here are the results.

The run has been smooth.
According to the log there have been

• 152 deleted and created orders due to moved prices
• lowest CNY price was 6.19910000 NBT
• highest CNY price was 6.20730000 NBT
• 30 occasions of “unable to update CNY price from yahoo”, which are quite evenly spread across the 14 hours

So no big CNY movement at all in these hours and no trouble.

Did I say that I love the format in which @creon provided the log?
You can very effectively dig for data in it. That’s what logs are for

I will continue providing liquidity there.

Why is there almost no participation in this custodial grant voting?

This is one of the cheapest offers providing liquidity with a compensation of only 1.5% per month (plus operator fee).

As basically only the exchange default risk and the bot malfunction need to be compensated it’s clear that the reward can’t be very high.
Still I (as liquidity provider) consider it a better deal than providing liquidity in a NBT/crypto pair.
So I consider it advantageous for liquidity providers.

It’s good for NSR holders as well, because the liquidity can be bought here for almost nothing!

…as long as @Cybnate’s NBT/USD pair at ccedk is rewarded with 10% per month it’s for sure the better deal for liquidity providers in terms of rewards.
I doubt the level can be kept that high with offers like this.

You might ask why I provide liquidity here as well and not only in @Cybnate’s pool.
Because I can
Seriously, I just want to help the best I can with the resources (money, time, skills) I have.
As I don’t have much of any from the resources from the list, testing TLLP pools is something that seems to make sense.

The run for (financially) efficient liquidity providing has begun.

Are NSR holders asleep?

[Nagalim]

why I provide liquidity here as well

1. Exchange risk is lower on Bter, in my opinion.
2. Both pools have a maximum size.
3. I am offering a service that in my opinion is better than parking (18% annually and always in control of funds).
4. Bter has a higher number of CNY trades than CCEDK has USD trades. This means the potential for trade volume on NBT/CNY for bter is higher than NBT/USD on CCEDK. As the hedging risk is similar (basically 0%), this means you stand to make more spread profit on my pool than Cybnate’s.
5. Bter may put CNY up on the buy side. This will further increase the potential for spread profit.
6. I don’t believe Cybnate’s high rates will last, and this reward follows a different philosophy whereby I increase the reward over time until my motions have trouble passing. I don’t think I’ll have as hard a time passing this motion in the future, especially if bter does get involved as a provider, so I should be able to increase the rates.

Alternatively,
I don’t think the question is why anyone would put money in this vrs @Cybnate 's pool, as the profitability for both is clear. The question in my mind is who would put money in a NBT/BTC pool when this pool has not reached target? The answer should only be people who think BTC is on the rise (aside from people who don’t trust bter). Anyone who doesn’t think BTC is about to shoot up should probably be putting their NBT in my pool for their own sake.

Basically, what @masterOfDisaster said.

Also, the reason I have such a small reward is because of all the other pools going on this month. If you don’t think my pool will fill, consider this a test run and I will increase my reward in a month to 3%/month. If you trust me not to run with the funds, the worst case scenario here is that we pay a tiny bit more than park rates for some extra exposure.

If you are not voting for this because you don’t trust me anymore, I can’t think of any reasonable way to convince you I won’t break contract to gain 150nbt, other than to point to the potential 20,000 nbt of liquidity.

[mhps]

Does @cryptog’s feed has this motion?

[cryptog]

Sorry. I am late.
[1381ae23c3686167e8fc86ed185fe2539106a5d9] verified and voted.

[masterOfDisaster]

The maximum order deviation should be 0.05%, which gives us our resulting operating spread of 0.2%. You can feel free to try to decrease the maximum deviation, I know I was getting rejects down around 0.01%.The reason this number can be so small is because we’re using a fiat pair. And not only that, we’re using cny, which is pegged to USD, i.e. nbt. This is a beautiful market, money to be made for everyone.

First I thought you intended to provide liquidity providers at this pool the opportunity to make money from the spread.
Thinking twice I came to a different result.
With this operating spread there can be made no money from the spread as the NBT/CNY trading pair has a trading fee of 0.2%.
Instead a liquidity provider will lose money if a lot of the provided funds gets shifted back and forth.
That is another risk that came to my mind.
In difference to non-fiat trading you have no risk of paying the price for others hedging.
But if your funds get shifted 4 times from NBT to CNY and back per month, you pay an exchange fee of 420.2%=1.6% which is higher than the expected rewards per month.

Exchange fees eating money is a general problem for liquidity providing.
One shouldn’t forget that when it comes to liquidity providing in relatively low risk fiat trading pairs…

I’m glad to see that the number of votes for this proposal rises!

[Cybnate]

Sorry. I am late. [1381ae23c3686167e8fc86ed185fe2539106a5d9] verified and voted.

So am I. Will be added to my datafeed in next hour or so.

[Nagalim]

Exchange fees eating money is a general problem for liquidity providing.

Two points here.

1. Bter has said they will lower the trading fee to .1%. This will mean providers will indeed profit off the spread.
2. Bter has said they may provide liquidity. If the exchange is participating, exchange fees are not our enemy, they keep bter happy such that they may provide even more liquidity if all goes well.

But if your funds get shifted 4 times from NBT to CNY and back per month, you pay an exchange fee of 420.2%=1.6% which is higher than the expected rewards per month.

This is not the case unless your spread is 0%. My spread tolerance is 2.5%, so if you use the numbers in my bot you will end up with a 0.2% spread, perfectly offsetting the standard fee. As I said, if Bter lowers the fee then providers have even more to gain here.

[peerchemist]

Voting since you have posted.

Btw, is it complicated to get Fiat (CYN) to Bter from Europe? How do you do it?