OK
Supposing it is true.
Constructive and interesting to know is this in a kaizen approach:
If one does not ask the good questions there s no way good answers will come out.
Notwithstanding witchhunting.
Because jordanlee, our lead developer, verbally attacked our lp’s and flot. He pretty effectively used his position to make the system fall apart in an attempt to satisfy a hugely risky short made during the buybacks.
The system was designed to function on a larger scale. The money supply is only around 800,000 and the NuShare market cap was only around 2.5 million USD before the drop this past month. We likely had around 20 people providing liquidity. The entire enterprise ran on about $15,000 per month, with only a fraction of that going to liquidity operations. There isn’t a lot of money being paid to liquidity providers. Much of the compensation goes to silent users of pools and NuLagoon. The pay for decision makers like NSR FLOT members is very low, a little more than $400 every 3 months, as I recall. We need these people to watch the forum regularly, understand passed motions that now total dozens of pages, and consider the effect of new motions on their roles. These are capable people with full time professional jobs and families. But our network isn’t the major focus in their life. We are asking too much for what we can afford, although it would work if we had considerably more scale.
I know these people are capable and well meaning. It is a position that requires expert knowledge. I am personally incompetent at most jobs. There are only a few I’m actually well qualified to perform. Our liquidity providers are no different.
You have to pay more. We can’t afford to pay 20 people a lot more, but we can pay one person (the Chief of Liquidity Operations) a lot more, affordably. Give this person the authority to decide what is done with reserves and NSR sales. Other liquidity providers, of which there will only be a few in the immediate future, will comply with the expert recommendations from the Chief of Liquidity Operations. In this way liquidity operations can have coherence and well informed decisions. The costs will be much less than in the recent past. It will still have a degree of decentralization as there will be several people involved.
I have thought a lot about that. I am not sure. I would like to hear the opinions of others. I would guess ignorance, inattention and a short sighted desire to not dilute NSR ownership were all factors in various cases. In 2015 when we had weekly NSR sales, it did put pressure on the price, but it was modest. Shortly thereafter, gains of over 100% were seen. It didn’t damage us. Allowing the peg to break causes extreme pressure on the NSR price, as we have seen. Even modestly heightened risk of a peg break will lower the value of NuShares. That is why need to be careful to quickly refill reserves when they have crossed certain defined thresholds. The more out of balance the system gets, the more expensive it is to rebalance it. We need small, assertive and early actions to rebalance things. We didn’t get that. Now our actions are quite late, and the price for corrective action has risen a great deal. Not selling NSR was a poor calculation as well as being a clear violation of multiple motions, as has been discussed elsewhere.
You are saying someone’s criticism of particular actions and suggestions for alternative actions made NSR FLOT members unable to sell NSR?
Really? How does that work?
B&C welcomes high value trade, dislikes micro trade.
If I wanna sell 20BTC for 2000LTC, B&C is my first choice because after so many bad things happened on centralized exchange, I don’t trust them any more, especially with my big money.
And I don’t care paying 12BKC(USD) in this 20BTC value transaction at all, because the trade fee is as low as 0.1%. And I keep my private well on B&C platform.
B&C just need performe less than 100 such high value transactions per day to achieve one million volume. Of course initial stage, our fee (BKS/tx) is low but if B&C becomes popular enough, we can ban those micro trade by raised fee, WE DON’T CARE TRADE QUANTITY, WE CARE VOLUME IN USD.
BTW, I can buy BKC directly on B&C with BTC.
@Phoenix, you have mentioned multiple times that Nu cannot afford liquidity engine experts given its current small scale, so we should instead elect one expert to lead operations.
Can you please explain what qualifies somebody as an expert on liquidity engines? Since this model is brand new and has never been tried before, how is it even possible that there are experts available to run it? The only person who can claim to be an expert is the person who designed the system, @JordanLee.
And even then, since this is a brand new concept, the designer of the liquidity engine model can only use theory to explain how he believes it’s supposed to function. The designer cannot have absolute certainty that his theory is based in reality until he can actually prove in the real world that he can run the liquidity engine successfully in a sustainable manner without danger of collapse.
How can you be so confident you are an expert when this has never been tried before? What qualifies you as an expert on liquidity engines?
I know the compound negtive interest well, whether the remaining is 28.24 or 14.12 is not important, the key is you can change customers balance as you wish, this is the red line, customers will prefer FIAT/goverment than NBT/Nu, at least they can parade in real world, but in cryptoworld, they can do nothing if Nu decide to cut 60% of their balance.
Psychology.
Welcome our customers competition, if they provide lower spread, we have better pegging quality and the service is free, this is exact the situation I want to achieve. Nu can only provide official guide spread, within it, is the room for a spontaneous order，ie the result of human’s activity while official spread is the result of human’s design.
Borrowing NBT by pledging NSR is on blockchain, it can be implement: you park NSR to granted some NBT on a ratio voted by nushareholders, automatically.
I agree. It is irrational, especially considering the Standard and Core only asks to dilute less than 1% per week.
It seems like you are realizing that LPC has to be a full time (professional) job that is well paid and even affiliated to the expert title.
Interesting.
I don’t oppose centralized operation in initial stage, but if Jordan want Nu becomes success in long run, the “spontaneous order” is a must, just like Satoshi designed a bitcoin system that automatically drives people to mint to hoard.
This is very important architeture design, the duty of software architect.
What’s that and what does it have to do with Satoshi and Bitcoin?
by not knowing human nature, playing with fire, getting the house burned, and having to come back as a phoenix.
It was your choice to get into a risky business. You gave the power.
The way I see @Cybnate’s plan is that it sets it up so that Nu can profit from arbitrage between short-term interest rate and long-term ones. We all know most traders are after short-term gains and would borrow money at a high interest rate for certain trading opportunties. @creon’s plan just makes nubit a such kind of debt which Nu charges interest (coin-age fee) if borrowed. If you don’t want to pay you lend it back to Nu by parking them. This scheme makes nubit less a currency business than a lending business.
This overall marketing plan sounds attractive –
@Cybnate Do you still maintain the same liquidity tiers as before, Tier1-Tier3?
I understand that Tier5-Tier6 are modified in their workings
I think there are 3 reasons, to me, as a NSR FLOT member, as already explained here.
But I think the main reason is that bitcoin rise happened too fast, decreasing suddenly the buy side significantly within a few hours.
T6 could not be unlocked in time to replenish the buy side. Instead increasing the spread was allowed.
So I have a big concern about your proposal. Even if there is commander that takes care solely of the liquidity operations, making the process faster, that would not erase the fact that unlocking funds from T6 would still take a few days.
If the buy side is depleted in a few hours, how are you going to cope with that?
In other words, one of the main issues is the rapidity of the T6 unlocking process, which is not solved in your proposal.
So we need here some computing assistance?
To be more elaborate – the liquidity tiers model and the way they work,
particularly Tier5 and Tier6
That was an initial description (2014, when NuBits was released) from @Yurizhai but it still holds and helps look at our issue.
https://bitcointalk.org/index.php?topic=794059.msg8943582#msg8943582
The basic idea is that:
The price of NuBits is pressed downward by shareholder elected ‘custodians’ selling NuBits for $1.
The price of NuBits is pressed upward by anyone who owns NuBits being able to take their NuBits out of circulation (called parking) for a limited time in exchange for a monetary incentive, the incentive amount chosen by shareholders which will reflect how needed parking is at the current time.
I believe one day we will have issues with reacting in real time with the market and selling NBT
but what broke the peg this time is our inability with taking our NBT out of circulation in real time with the market.
And electing @Phoenix as Chief liquidity officer because of purported expertise wont solve essentially the problem because @Phoenix is still a human being, that cant be online 24/7, and is certainly error-prone.
@Phoenix Unless you have invented a tool (an AI or a software? in which case it would make sense to share it with others for the benefit of Nu) that makes you much more reactive, much more enduring and error-free, there is no reasonable reason to think the same issue wont pop up again.
Fairly simple. Immediately after JL attacked FLOT 2 of the 8 FLOT members resigned (25% of a system that operates off >60% consensus), including the most active FLOT member. This was a direct consequence of the attacks made by THE LEAD DEVELOPER, not just some schmuck. This caused signings to stagnate and the system to fail. This seems super obvious to me, I’m unsure how anyone could fail to see it.