[Passed] NuPool 8 ALPv2

NuShares Passed Grants
#1

https://daology.org/proposals/357ad1f537df9015b00dd5797de6e1186ff8092d

Hi Shareholders,

First off I would like to apologise for the overrunning of the 7th NuPool operation. As I explained, factors external to Nu have been taking up increasing amounts of my time and made it difficult to develop the new software and manage the existing concurrently.
The new software is ready now and, assuming no major issues over the next few days, the new version of NuBot will be released very soon.
That means that it is time to start voting on the new grant for the new operation.

As you are no doubt aware the new ALP software uses a new reward mechanism which has been dubbed CRFR. This is a fixed reward mechanism meaning that the same amount of reward is given each minute. The reward is shared out amongst participants based on the percentage of the total liquidity that they have provided. The only time this isn’t true is when the targetted liquidity amount hasn’t been reached. In this case the percentage of the target that has been reached dictates the percentage of the reward that is split amongst the participants. These two factors together mean that there is incentive both to provide the most liquidity (to get a larger share of the reward) and ensure that the target is reached (so that the maximum amount if reward is payed out).

ALP v2 uses a database for all operation so there should be no more missed payments if the pool restarts and reporting will be much much easier.
The software hooks into the same price streaming server used by NuBot so there should eventually be less discrepancy of price across ALP supported exchanges.

The new system will also allow for different rewards to be set for different tolerance bands (termed ‘ranks’ in the software), asymmetrical rewards on different sides and dynamic updating of pool parameters during an operation. I believe that these features will provide a powerful toolbox for shareholders to direct liquidity where it is needed.
For this first outing though I intend to keep things simple with balanced sides and static parameters.

With the recent performance of NuPool and the combined factors of FLOT/NuBot gateways providing a safety net and me becoming a risk due to time constraints I would like to propose a reduction in the target that NuPool aims for.

The proposed parameters for the new operation are:

Operation duration: 30 days

Poloniex:
Target: 15000 NBT
Tolerance: 0.0105 (submitted liquidity will only be considered for reward if it lies within 1.05% of the peg price)
Reward: 0.02431 NBT / minute (1050 NBT over 30 days or 7%)
Fee: 150 NBT
Total Requested: 1200 NBT

Bittrex:
Target: 2000 NBT
Tolerance: 0.0105
Reward: 0.003241 NBT / minute (140 NBT over 30 days or 7%)
Fee: 20 NBT
Total Requested: 160 NBT

Total Requested for both exchanges: 1360 NBT

Custodial address: BAs6fhm6bfJ1b6LGnDQwah1C8frfVjjWhm

10 Likes
[Passed] NBT EXIT gateway on Poloniex provided by @masterOfDisaster
[Discontinued] Cybnate's Nu datafeed - BETA
[Passed] NuPond Term 11
[suspended] Cryptog's Nu data feeds - BETA
[suspended] Cryptog's Nu data feeds - BETA
#2

Fix Cost or Fix reward?

#3

both and neither.

The reward is fixed unless the target isn’t reached at which point the reward is lower.

This model was termed combined-reward-fixed-cost or CRFC by @Nagalim here How is liquidity provision incentivized?

1 Like
#4

isn’t this too much for ALPs? I mean gateways have 1% and they are considered the last line of peg “defense”.

1 Like
#5

1% offset - at least!
Paremetric order book makes the next layer of orders even more expensive.
The spread for the the orders in the first line is 2% and the SAF depending on the exchange more or less 1.6%.

[Withdrawn] Make Firing and Replacing Incompetent Liquidity Providers Our Top Priority
#6

From Nupool 7 i see a lower tolerance:
Server Tolerance: 0.0105 or 1.05%
What is the purpose of the increase to 1.5%?

nupond 9: Tolerance: 1.5% CNY & 1% BTC
Liquidbits 7: 0.0085 tolerance on either side of a pair

#7

MoD,
according to Nubot’s configuration, the first 2 orders are below 1,5%.
I am afraid that ALPs will get behind nubots :smiley:

#8

I think we should increase gateway spread. However, i also am curious about the 1.5%. Is it to make room for parametric ALP? My CNY pool is 1.5% only because using a double btc feed requires a large deviation to avoid shifting orders constantly during volatile times.

#9

I’ll increase the offset to 0.02 right away - 2% offset for a “last line of defence” shouldn’t be too much.

#10

0,016 :stuck_out_tongue:
I wonder who will keep a tighter spread <0.1% in Polo.

#11

The tighter you make it, the less gain for Nu, if your bot trades funds :stuck_out_tongue:

#12

I just don’t want to scare away the NBT traders due to the larger spread.

#13

Are you speaking of thoseNBT traders who often successfully hedge with NBT and drain money from Nu?
They don’t need to have a tight spread.
The guys who just want to buy and sell some NBT need a tight spread, not the whales.
Parametric order book was made for that.

In the future there might be a very tight ALP with not very much order volume, which can be provided cheaply and bots run by Nu, which offer bigger volume at much higher spreads.
This way the big traders pay some money for the service Nu offers.
I have no intention to move the wealth of Nu to traders by offering big volumes at low spreads.
As I run the NuBot with Nu funds, I will of course follow each order that is given by motion.
I can only recommend to keep the orders close to the mid price small.
The current ALP scheme is not really matching that vision.

1 Like
#14

You have a point here. But the thing is that i am hearing sometimes that 1 NBT is not 1 USD but 1,01 usd
or 0,99 usd, etc. You know, it is like we are “telling lies” about the peg and i don’t like it when i am reading those things by new users.

#15

Nu never promised to offer NBT as a pegged product to USD(expressed in BTC), but to USD.
It’s very tightly pegged to USD!

Sadly the “advertising phase”, in which a “peg” to USD(BTC) is offered, is still going on and costs a lot of money.
It’s really about time to get US-NBT focussed on USD:

3 Likes
#16

We arent offering to buy and sell at $1. We are simply offering the best product on the market. As long as that’s true, we don’t have to make any promises. You don’t hear the sun promising to rise every morning, but I’m still pretty convinced it will again tomorrow.

1 Like
#17

Evening.

Apologies, the 0.015 is a misprint, it was intended to be 0.0105 to mirror the current tolerance of NuPool and keep the spread-after-fees consistent. I will update the Op now and the daology post shortly after.

3 Likes
#18

OMG! So much debate about spread and it was a misprint! :smiley:

1 Like
#19

I’m still open to debate on it, just thought it important to correctly show my initial intentions.

#20

Debating liquidity and parameters is debating one of the most important parts of Nu.
This can never be wrong :wink:

1 Like