[Passed] Proposal to Provide Sell-Side Liquidity and Shareholder Dividends

NuShares Passed Grants
#1

Edit:

To the attention of all shareholders

I am requesting a grant of 200400 NBT;
My proposal has two versions : v.0.1.0 , and v.0.1.1 ;
The first version is for sell-side liquidity only. The second version will operate the granted funds as dual-side liquidity for the first 90 days. You can find differences here

To vote for using the funds as specified in v.0.1.0 just vote for 200400 NBT @ B9fv9Di2Y4RxUHzrwjtfq5fetAhqULzWKL

To vote for using the funds as specified as in v.0.1.1 , in addition to the vote above, cast a second vote of 1 NBT @ BMmwnkZo61gw2m3fqRFApPS5nbW1JNwf5J

Version v.0.1.0 is already close to passing. I will not wait for v.0.1.1 to pass before beginning the original grant’s operation. If v.0.1.1 passes, any proceeds that have been set aside for dividends will immediately be put into a buy wall and the bot will be switched to dual-side mode for the first 90 days.

jamie

End edit

Hello, NuBits community!

My name is Jamie Miller. Not many of you know me but I have been quietly following the developments of Peercoin and the NuBits project for the last several months. I’m very excited about what you guys are creating and I have decided that I would like to try to get more involved. I am personal acquaintances with Kiara Tamm. She has explained to me that there is a serious need for additional liquidity in the Nu network and suggested that I attempt a custodial grant for dividend custodian. I’ve used Kiara’s grant proposal as a template. She has helped me put this proposal together, along with some help from Ben and Pennybreaker.

Problems that I see:

  • The Nu network is in the very early stages of it’s existence, the money supply is relatively small, and it is very hard to gauge the future demand for NuBits. The right article, from the right publication, could easily cause the existing liquidity to be quickly eaten up, sending the price of NuBits above the intended peg of $1 USD.

  • The security of the peg, by design, depends on redundancy of liquidity providers. It is unsafe to leave the responsibilities of maintaining the peg in the hands of one custodian, when a simple equipment or software failure could cause the peg to be lost.

The solution to both of these problems is to start electing additional liquidity custodians as soon as possible and continue electing new custodians for the foreseeable future, which presents a new problem:

  • Only a small handful of people in the community know who I am. How and why would you ever trust me with millions of NuBits?!

When I first started entertaining the idea of putting this grant together, I was thinking about amounts that are really needed. Numbers from one to five million were tossed around. What I realized is that not only is it unsafe to trust one person with that large of a percentage of the network, it’s unnecessary to do so when many smaller grants could be created.

So here is a summery of what I am proposing:

My first grant proposal is for 200,000 NBT + a 4,000 (2%) NBT fee. This is purely a dividend grant. It is not intended to serve the same dual side purpose as Kiara’s grant. It will be broken up, into four (4) dividend periods of 50,000 NBT each.

Upon issuing the first dividend payment of $50,000 worth of PPC, I will submit a second grant proposal for at least the same amount. When the second dividend payment is made, and if share holders are happy with my performance, I will submit a third proposal. This will allow me to gain trust with share holders, while risking less, but will also serve to keep additional money supply continuously coming in. There will also be a benefit to spreading the grants out across multiple addresses. This will allow me to run multiple bots from multiple locations, effectively creating redundancy of infrastructure.

What I have just outlined, regarding additional grants, is not part of this proposal. This proposal is for the first grant only. I am simply suggesting how things might move forward if the share holders elect me and are happy with my performance.

Proposal to Provide Sell-Side Liquidity and Shareholder Dividends

SHA1 hash of raw document: d99aa0d1a43eabbf0a09ef6d43084a8ae83142e5

Thank you all for your time and consideration.

Jamie Miller

Edit:
Below you will find a link to my amended grant proposal which specifies using the granted funds in dual-side mode for the first 90 days of the Grants operation.

Proposal to Provide Dual-Side/Sell-Side Liquidity and Shareholder Dividends (amended)

Here is the SHA-1 hash of the raw amended proposal: 56a848081d3452b06255a4edca8fd88a49825a61

Also, it has been brought to my attention that the three additional grant addresses will no longer be necessary due to a recent development with NuBot. I have removed my votes for these three additional addresses.

End edit

Edit:
Jordan Lee has pointed out to me in the following thread that he intended to use the motion voting system for a couple of important up-coming motions. As the client is currently designed, only one motion can be voted on at a time.

Because of this, we will use a grant for 1 NBT to decide if we should use the amended version (0.1.1) of my grant proposal.

If you wish to amend my original proposal, please vote for the following grant for 1 NBT:

BMmwnkZo61gw2m3fqRFApPS5nbW1JNwf5J - 1 NBT

End edit

Edit - 28-JAN-2015:
The following motion has passed. It includes important changes to the operation of this grant.

Motion hash: 4C1FA7B6B7B435BB215B93A771681232F1FD6237

Begin Motion
Passage of this motion will amend Proposal to Provide Dual-Side/Sell-Side Liquidity and Shareholder Dividends (amended), Revision 0.1.1, by Jamie Miller (https://gist.github.com/jmiller99/8273219429deec2f0381) in the following ways:

  1. The grant will continue to provide dual-side liquidity to the Nu network until 01-Oct-2015, at which point the funds will be removed from exchange and secured until further directed by shareholder motion.

  2. Custodian addresses are only able to submit liquidity info to the Nu client for a period of 260,000 blocks, or approximately six (6) months. Therefore, on 20-Feb-2015, the grant operator will request that a new grant address and amount of 1 NBT be voted for. Upon passage of this address, continuing grant operation will provide liquidity info through that address.

  3. Dividend distribution will be removed from the conditions of this grant. This applies to currently held funds as well as any additional funds accepted from other Nu custodians. Release of any funds being stored or operated under this grant will occur only if one of the following conditions are met:

  • a) The grant operator is requested by shareholder motion that some or all funds be permanently destroyed (burned with no compensation to shareholders or custodian)
  • b) The grant operator is requested by shareholder motion to transfer some or all funds to a different custodian

End Motion

"4c1fa7b6b7b435bb215b93a771681232f1fd6237" : {
"blocks" : 6313,
"block_percentage" : 63.13,
"sharedays" : 1741600271,
"shareday_percentage" : 56.27961303
},

End edit

1 Like
Proposal for NBT/BTC dual-side liquidity provider on Exco.in
History of the Nu Network (Feedback Please)
[Passed] Dissolution of FLOT and transfers
[Closed] Motion to cease shareholder-funded NBT/PPC operations
#2

I can confirm that I’ve been in touch with @jmiller over the past couple of weeks and have confidence in their ability to act in the interests of shareholders to fulfil this proposal. I appreciate that Jaime is trying to start small and wants to build up a reptuation in the community.

1 Like
#3

Two questions:

  • Is “Jamie Miller” attempting to remain anonymous, and not use his real name? This is not made clear in the proposal.
  • Will these funds be placed at a lower price, the same price, or a higher price than KTm’s funds?

Note: 200’000 NBT does not seem to be “starting small” in my opinion. Putting forward an anonymous grant, and walking away with a cool 200’000 NBT, is a pretty major theft. If the funds are mishandled, and used to crush our buy walls, NuBits would suffer huge losses to reputation. Ben, do you have more information on this person’s identity?

EDIT: I’d like to mention that there is extremely low risk of the price getting out of control on the upside. If KTm’s liquidity is eaten, smart traders will sell their NBT for anything over $1, in anticipation of the next custodial grant.

#4

I can confirm that I have also been in touch with Jamie recently and have confidence in their ability to act in the interests of shareholders. I like the idea of having a game plan for future grants.

@Chronos While it’s theoretically true that smart traders will sell above $1, this is not something we should be looking to test. The goal of the network is to maintain the peg. This is not just any old crypto coin that we’re dealing with. NBT is the first viable crypto asset that could actually compete with fiat. I believe that when people really start to realize this, we could be dealing with demand that even Bitcoin has never seen. The NBT market cap is currently 2 million … That’s almost nothing. The money supply must expand and we must start planning for continued expansion. Also, there are most certainly some die hard PoW whales out there who would pump-n-dump NBT to da moon and back, just to make us look bad. We need to be ready with additional money supply and redundancy of liquidity providers.

1 Like
#5

I noticed Jamie has proposed to provide liquidity on up four trading pairs. At the present time NuBot can only work with one trading pair on one exchange. Because NuBot requires signing with a custodial grant private key, to provide liquidity on four trading pairs requires four instances of NuBot and four different custodial grant private keys.

As we continue to improve NuBot it will support multiple exchanges and trading pairs. However, for now, Jamie will need to receive three additional custodial grants in order to execute the terms of her proposal. I suggest she ask for 3 additional grants of 1 NuBit each. KTm will need to do something similar.

1 Like
#6

@Chronos

  • All that I am comfortable saying is that my privacy is very important to me. If this does not satisfy you, please do not vote for my proposal. I am responding to what I interpret as a need that must be filled. I would be perfectly happy for this responsibility to fall on someone else.

  • Depending on the exchange pair, the funds will be placed for sale at the equivalent to $1.00001 + exchange fee. The “0001“ is intended to make sure the funds are placed for sale slightly above dual side bots which are configured to sell at $1 + exchange fee. If Kiara is running her bot in dual side mode, her sell orders will take priority.

@JordanLee

Thank you for letting me know about this. Below are three additional addresses that I will put votes in for at 1 NBT each.

Edit: Removed the three additional addresses.

#7

I’m sitting between a rock and a hard place. This grant is indeed required to maintain the peg, but requested by another custodian with no track record at all. I’m going by the recommendations from Ben and Pennybreaker and have instructed my wallet to vote for all 4 addresses as there is basically no choice.

Reputation is something we need prioritise even if it is temporary with a system from the competitor. Something is better than nothing given the amounts involved. There is nothing at stake for the new custodians, technically they could walk away without a trace and without any reputational damage. Agree they will need to build that but I don’t think an account on this forum is good enough.

#8

Hahah… I see what you did there. And I totally agree. Existing reputation systems are very imprefect.

#9

Smart

#10

Is there a particular reason why the grant is 100% dividends? I personally think that now ( and also in the future) we should think peg first, profit later. Buy liquidity is needed for maintaining the peg and we are short of LPC.

Personally I would vote for 0% dividends and 100% liquidity.

#11

We see many fake projects on peer4commit set up to scam donators. We WILL see many scammers asking for grants (sorry I am not saying it’s you, Jamie) in the future. I don’t see an easy solution to this problem. A big reason why it is difficult to lend crypocoins is that there is little the lender can do if an anonymous borrower takes the money and runs away.

For the problem on hand, can’t this be fixed by deploying bots on more exchanges? It seems far easier at this point. Why don’t we put one on cryptsy, on satoshi’s vault etc?

Is it possible to seprate the technical installtion/maintenance part of work from a less technical operation part, so that less technical oriented but highly trusted members can easily tend the bot. I am imagining of installing the bot at an exchange without fund and testing with testnet coins, by a custodian who doesn’t have to be highly trusted. Once installed, the bot runs with real fund remotely injected by the trusted custodian.

Is it possible to make the bot to work remotely through API (like those arbitrage bots) so they can run on many different reliable hosts?

btw I also don’t like the 100% dividends part.

#12

The difficulty of returning 100% to liquidity is determining when the custodian has met their obligations to the network. The concept of a perpetual liquidity grant will need to be introduced, but there are a large number of variables to consider:

  • maintenance term,
  • performance measures,
  • physical security of the buy-wall,
  • exchange default risk,
  • how a custodian can “retire” or turn over a grant’s operations to another custodian, etc.

I agree with @desrever that if the need of the network is liquidity (dual-side), these early grants proposals should be structured to produce as much as possible. It’s not as easy to manage (for the Custodian), but it is definitely in the best interests of the network to be very sensitive to the public concerns of solvency.

#13

Good points raised. There are other solutions if we don’t want to make perpetual liquidity. All this scam/ponzi/ accusation are making me worried and I don’t want to make shareholders look greedy to the outer world. I d rather use profits to buy nubits and burn them ( reducing supply ), give them to a bounties fund to develop the network, give to charity (what about that fund?) … Really I am pretty much for anything that is not free profit for shareholders and can lift our reputation. We want to build a strong community, not short terms speculators that want PPC to dump them and go home with some profits.

2 Likes
#14

@KTm, can you comment on how much of your initial liquidity remains on the sell side, with some projections on how long it will last? This will give us an idea of the urgency of a second proposal.

#15

@Chronos - I got a note from @KTm about having a problem logging in to the forums to post this. She added the current liquidity report to her Github account.

It looks like it’s still pretty well supported. How well that support would continue in periods of increased demand is hard to guage, however.

#16

Based on that report, KTm still has over 95% of the original grant supporting the sell side. We are in no danger at this point.

I propose that we monitor this balance report on a weekly basis, and reconsider the need for a secondary grant when this fund reaches 30% sell side support, or drops by more than 15% sell side support in the week since the previous report, whichever comes first. (Percentages based on the amount of the original grant.)

Open to everyone’s thoughts.

#17

I personally find claims of ponzi scheme to be the ridiculous yammerings of competitors who wish they had come up with the idea first.

  1. Nu is a decentralized network

  2. Nu creates something useful to the world

  3. Nu continually works to maintain the health of what it creates

Early share holders should enjoy profits for what they are creating and maintaining. It’s not like every other crypto coin that has been even remotely successful didn’t pay massively to its early adopters.

#18

While this is true, I don’t see a problem with our current level of liquidity, at the posted burn rates. I also know that there is a lot more to what has been built than what the competition is spouting off in their own forums, but in my experience, finding ways to not play into their hands is important.

#19

There is also this perspective: if we have “too many” custodian funds in a buy wall, we can pass a motion to immediately pull a certain amount of them and distribute dividends. The reverse is not true: we cannot retract dividends to reinforce the buy wall.

For this reason, we should err on the side of stronger buy walls (provided that the custodian is trustworthy).

#20

Hi all,

Thanks to everyone for their feedback. I can see that there are several important points being made here. The most important of these seems to be the lack of buy side support.

Perhaps my original proposal was a bit rushed. At the time, my understanding was that no other grants were outstanding and something was needed quickly since it would still take at least a week to pass. This is one of the reasons I opted for a simpler approach than KTm’s hybrid proposal. I was able to ready the proposal in one afternoon.

I am not interested in creating a hybrid proposal like KTm’s. The reason being, I have been able to see, first hand, how much work it is actually going to be for her over the life of the grant. The work she is putting into it is not worth the fee, imo, and I did not feel comfortable asking for a higher fee since many of you do not know me.

Let me propose a solution:

Everything about my original grant remains the same, but instead of immediately returning the grant proceeds to shareholders in the form of dividends, I will operate 100% of the grant as a dual side custodian for a certain amount of time before continuing with the plan of 25% payouts in the form of dividends. The set amount of time could be 3 months, 6 months, or require motion vote to activate the dividend payments.

I would create a motion to make this change to the grant proposal, but I’m afraid that would take too long, given that voting has already begun. However, if everyone in this forum agrees, I will amend the proposal and submit it as a new grant. We can all remove our votes for my original proposal and vote on the new one.

Thoughts?

jamie

Edit: It is also quite possible that we could stick with the original grant and have a motion to amend the proposal pass long before the first dividend payment is due.