[Superseded] LiquidBits term 7 grant - Automatic Liquidity Pool (ALP)

Interesting thought. My proposal is based on the limited volume/usage on those pairs.
What would be the reason to increase liquidity? To allow more LPs to participate? What is in it for Nu?

Someone with 10 grant fiat can see enough available liquidity and feel worth it to use the direct fiat-nbt route instead of fiat-btc-nbt.

plus “0.09%” number gives some pressure to other pools to lower reward.

I can see some merit in this, worth considering this approach. Interested to hear whether there is more support for:

  1. increasing potential liquidity significantly and decrease rewards as MHPS proposes OR
  2. decreasing liquidity and only slightly decrease rewards as per OP.

The cost for the shareholders would be about the same.

Another option is increase the target to 10k and lower the reward to 0.15%, for those do see the value of nbt/fiat pairs. It increases liquidity AND lower the cost [edit: per unit liquidity]. If target is met, then increase target to 15k and lower reward to 0.1% …

The 0.9% number was there by me to match the 50% reduction in target in your proposal because I don’t like to see and reduction in target. Reducing fiat operation by half seems too big of a change.

Yah, like 7500 and .15% would work too.

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me too. We have to keep the factor ‘exchange risk / LP rewards’ stable in some way :wink:
I also like the ppc/nbt pair, please remind me why this had been stopped?

No good price feed / required tolerance to avoid manipulation is like 3-5%

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I’m for increased liquidity and lower rewards. However the numbers shake out.

Right, the direction the LPs want is clear. Any other Shareholders willing to share their views to the contrary? Otherwise I’m inclined to adjust the proposal to increase the targets and decrease the rates while being cost neutral.

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Based on the feedback in this thread I’ve published a second version (v2) of the original proposal for term 7:

Key changes from term 6 in v2 of proposal (see link at bottom of post):

  • Increased maximum from 5000 NBT to 7500 NBT on NBT/USD pair
  • Increased maximum from 2500 NBT to 3750 NBT on NBT/EUR pair
  • Increased maximum from 1000 NBT to 1500 NBT on NBT/BTC pair
  • Reduced payout from 0.18% to 0.14% for NBT/USD pair (-/- 33%)
  • Reduced payout from 0.20% to 0.15% for NBT/EUR pair (-/- 33%)
  • Reduced payout from 0.24% to 0.20% on average for NBT/BTC pair (-/- 20%)

The changes in this updated proposals are aimed at increasing liquidity while decreasing the liquidity cost per unit. The overall maximum cost are about the same as in term 6 but higher than the original term 7 version 1 proposal.

However, while still following the Dutch auction, fixed reward model, I expect the actual cost to be lower as the rates have decreased 33% for the fiat pairs and 20% on the BTC pair and the LPs are likely going to respond to that.

From a Shareholder perspective it will be interesting to see how the ‘market’ responds to this. I hope this is a way to reduce the overall liquidity costs. At least it will help with the price discovery for liquidity.

The revised proposal (v2) is published here: https://daology.org/proposals/f6349c0339f210f4a26a91acc10b085a03640a9b. The original proposal is also still published for comparison purposes. See OP.

Looking forward to your comments.


Considering the desire to decrease NBT/BTC and move to FLOT funds…I’d keep the pair @ 1000 NBT.

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Good suggestion, will take that aboard in the final proposal.

Just to bring it to attention that if the mean time between total failure (100% loss of fund) of cryptoexchanges is 2 years, which I think is a fair number, then the average daily loss is 100% / 2 / 365 = 0.14%

So being compensated at 0.14% in a pool is already below average risk-adjusted return of putting funds in an insured bank earning any above-zero interest.


I believe you are now making a case to go with the original submission and just leave LPs competing until they think it is not worth it any longer according to their risk appetite. Just leave the compensation high, but the pool small in order to reduce the costs for the Shareholders. I’m on the fence but tending to my original proposal leaving the compensation high and reduce the pool size instead of the second one.

For the same total reward Nu wants more liquidity and LPs want better reward for the same risk (fund on exchange). So the OP prroposal does seem to be better.

btw The reject rate is very high lately.

I’m seeing between 93% and 96%, it is not too bad, but it appears to be deteriorating indeed.

I get as low as 26% in the last hour and many 30-70%. Maybe it’s my ISP?

Not sure, did you try to restart the bots. Sometimes a modem reboot might also help to ‘wake’ up your connection. My maintenance/control bots are running in the cloud and not from a home location. Please let me know if that makes a difference.

The lowest value I have seen in the last 30 mins is 86% on both EUR and USD pairs, but average is higher. Still seeing 100% tops too.

I think we should experiment with more liquidity for less costs, despite @mhps calculation of risk/reward ration. Therefore I am more inclined to vote for the second proposal than the first proposal.

Just posted the final proposed grant for voting here: