I see. Tks for investigating.
I do not have any btc right now sadly.
I know the feeling. Apologies for the issues with the Bid liquidity at the moment. I don;t have any funds available with which i can clear the low hanging âSellingâ orders which are in the way of the pool client bid orders. I hope that whoever is selling NuBits at 0.00444000 realises that they are shortchanging themselves and removes the order or that the price of Bitcoin drops slightly.
In future runs a good portion of the pool fee will be held back in order to support the pool during these occasions
(update, nearly there. Only that one order remaining.)
You donât need to run with ordermatch=true, you can just come in and buy some nbt and take them off the exchange (park rates are high right now!). This is a pegbreak scenario, itâs something we need to tune our bots to deal with eventually. For now we just need a hero.
itâs starting. The liquidity is there (27.42 NBT worth), previously, this has caused a landslide of orders which clears the blockage.
You are right @Nagalim, it doesnât need an alteration to the bot, just some BTC to clear the low priced ask orders.
I agree too that this needs some attention in future releases. The ordermatch setting goes some way towards a fix but only works if the bot running it has liquidity available on the oposite side to that which is in trouble. I think a tier3 fund will help in dire emergencies but it would be better not to get there in the first place.
The parametric orderbook addresses this right? If not, my Price/Volume model would work here, and we can sculpt the profile to best handle peg-breaks. Basically, when the peg breaks like this there should be a few orders at high spread on the buy side. If those get eaten they get replaced by people wanting to buy NBT cheap, if the peg gets reestablished it will do so by gradually picking up the spread as more volume fills the bot.
{âcreditsâ: 17120, âusersâ: 9, âvalidationsâ: 205442, âliquidityâ: [11152.342749277499, 8453.116], âsamplingâ: 12}
It is solved.
I understand that the issue is that someone was trying to sell some nubits at a low price but can someone clarify why it was preventing liquidity to flow to the buy side?
Tks.
Since someone tried to sell NBT more than 0.5% below the actual price (i.e. 95 cent) the trading bots are not able to place their buy order without either matching this existing order or not getting compensated by the server because the price of the order would be too far away from the real price if its placed in front of the disturbing sell order.
ordermatch=True simply matches the order in this case, i.e. it would buy the NBT for 95 cent.
I see. Tks for the clarification. So someone was trying to game the system?
Potentially, or they just placed an order and forgot about it, or their trading bot crashed.
The other issue was that, despite there being two clients running with ordermatch=true, all the funds for those two clients were sell side and so were unable to clear the low orders.
One solution is to keep a strategic fund in a separate exchange account which can only be accessed by the server software. Instead of being traded as in the client, these funds would only come into play in situation like we saw yesterday.
Another option is to convince more users to run their client with ordermatch set to true. After all, it is a good opportunity to buy some cheap NuBits or sell them for a bit more than a dollar in the opposite case. Those are the sort of market pressures which we hope will maintain the peg when we move to fiat only pairs.
Do you imply that ultimately Nu would need to get rid of NBT/BTC ?
I can only speak for myself, but as it has been identified to pose a (financial) risk for liquidity providers to offer NBT/BTC trading pairs, Nu has a financial incentive to phase them out.
With the liquidity providing becoming decentralized and not being provided by shareholders the financial risk is being delegated to the new decentralized liquidity providers.
But indirectly this still poses a financial risk for Nu, thereâs just a layer in between. I think so because the liquidity providers either need compensation for the risk (which needs to be paid by a grant) or they will pull walls in case of highly fluctuating markets, bringing the peg in danger.
So itâs in the best interest of Nu to discontinue other pairs than NBT/fiat.
NBT/BTC is still available as long as fiat/BTC is available next to NBT/fiat.
But those who want to trade NBT/BTC then need to take the extra step on own risk.
I can only recommend to stop NBT/BTC as soon as possible.
Currently itâs still needed due to lacking NBT adoption.
Paying for the higher price of offering NBT/BTC (higher compared to NBT/fiat) is paying for advertizing NBT.
4 Likes
I donât think @JordanLee sees it this way according to his recent post in the B&C threadâŚ
He still wants NuBits to be the intermediary currency for crypto. That would imply not removing these types of trading pairs, unless going to fiat only is temporary only until the parametric order book feature is finished by @desrever.
Iâm also fine with the advertising and continue to pay for that for a while until adoption has some critical mass. When it has its mass the trading with other cryptos doesnât need to be supported by Shareholders. For now it is just finding the right balance.
I am OK with Nu running NBT/BTC as a convenience for NBT distribution, with limited availability. The custodian is free to pull the wall. NBT/USD should be always available.
Ask yourself this seemingly strange question: Why does no one have to lose money to defend the BTC/USD pair on BTC-e, even âBTC-e USDâ is $1 like NBT? The answer is that people can buy and sell BTC-e USD from many places other than BTC-e for $1. You donât need BTC/USD to prove BTC-e USD is $1.
Vote for the PEGs motion that is coming 
4 Likes
Sorry for the confusion.
Obviously NBT/BTC will be one of the most important trading pairs on B&C for some time.
I was not talking about about removing NBT/crypto pairs.
To be a bit more specific I was thinking about supporting these pairs with liquidity provided by Nu directly or indirectly.
Those pairs will have liquidity provided by traders.
Phasing out NBT/crypto pairs with Nu sponsored liquidity providing will happen due to monetary incentives.
If you (as a liquidity provider) want to provide liquidity on such a pair you have to take the volatility as a financial risk into calculation.
So NBT/crypto will require higher interest rates or the liquidity providers will shift to stable and less risky NBT/fiat pairs.
Ultimately the Nu shareholders decide when and how to phase out NBT/crypto pairs by the grants they will approve. Moving the interest rate of NBT/crypto pairs more and more to the interest rate of NBT/fiat pairs does the trick
2 Likes
This should be probably in another thread but basically I see supporting nbt/btc as a cost of acquisition of users. I do not feel that liquidity provision on this pair is predictably profitable as i tried to explain in the following thread: On the profitability of liquidity provision, unless we accept to increase drastically the lpc commissions.
However this would be in direct contradiction with the vision of jordan lee on b & c since he foresees a drastic reduction of liquidity provision costs enabled by its decentralized aspects.
1 Like
Whatâs the parametric order book?
Is B&C able to accept fiat pairs?
Would it be profitable for LPC to provide liquidity on B&C? We know thatâs far from a given on Nubits pools
Itâs an intermediate step toward the order book mirroring Jordan wants. Just read desreverâs posts in that thread.
1 Like
Only 169 nbt in buy side in: {âcreditsâ: 33588, âusersâ: 11, âvalidationsâ: 403064, âliquidityâ: [169.49416758000004, 10068.318210430001], âsamplingâ: 12} âŚ
There should be a mechanism that incentivizes lpcs to transfer their fund onto the buy side.
I really like the maturing order model for this. You have ask side offer a flat rate, like we have now. However, for bid side you make it so the rate builds up over time, eventually reaching a maximum that is higher than the ask side. This gives incentive to find ways to turn your nbt back into bid side without going through the very market youâre trying to support.
There are other tricks we could try, but ultimately automated burning is the only real way to solve this issue.