Unseeded Auction Thread


Sorry about the late submission. The fee policy had some bugs, but I’m hoping they’re cleared out now. The fees go like this:
NBT input: 0.002 NBT
NSR input: 0.2 NSR
Auction price is determined using just input fees.
NBT output: 0.0004 + (0.01/#addresses) NBT
NSR output: 0.04 + (1/#addresses) NSR
These are all multiplied by the ‘paytxfee’ parameter in rpc.getinfo(). In all cases, the participant who submits using 1 input and 1 address pays the smallest fee.


What about updating the initial post with this information, a link to nuauction.net and other information (like links to the pictures).

I think this auction is a very important piece of work that helps linking the value of NBT and NSR with each other.

I wonder what @Benjamin’s take regarding this type of auction is.
As I (and I bet I’m not alone) consider him being an important resource for economical aspects of Nu (albeit not being on the development team), I’d like to know how his assessment of tying NBT and NSR to each other with such an auction is.


I am hoping to make other pages of the website with PR and technical help material. I’m going away for a week soon and I’m just trying to get the automated participation going. Early august we can start phase 2: stabilization.


Count me in!


You can totally participate whenever you want using the wallet software as stated in the OP. Use small volumes please. You might want to hold off on using the raw Tx participant builder until my next patch (though it should work fine as long as your funds aren’t sitting in a billion tiny outputs.)

Edit: New patch: https://github.com/Nagalim/SeededNuAuction

Upgrades include:

  • Fee assessment, no limit to # of inputs
  • Periodic submission every auction on (or slightly after) a particular block
  • Market price feed (poloniex)
  • Noobswitch checks with user on first submission; allows periodic submission without user input

Things lacking:

  • Proper error reporting
  • Bter price feed is broken
  • Memory leak on sendrawtx, even though the Tx is valid?


Sorry. Very basic auction.
What is the meaning of unseed/seeded in Unseeded/Seeded auction ?


My understanding is that unseeded auctions have only individuals participating in the auction, whereas seeded auction have Nu participating in the auction.

By participating in the auction Nu has the chance to either convert NBT to NSR or to convert NSR to NBT (depending on the liquidity situation) - outside an exchange and in a very transparent way, because of being visible on the Nu blockchain.

The seeded auction is (in my humble opinion) of great importance for Nu’s liquidity providing.

I wonder why there seems to be so little interest in it…


I suspect it is because shareholders do not fully understand it yet, including myself.
However I am studying about it.
In case you grasp its main principles, could you share your understanding?


It is hard to understand as these concepts are not comparable with something existing and therefore it not clearly answers the question: what problem does it solve for me (or Nu)? Only when that is clear it will motivate people to participate. And Nagalim is trying hard to explain it clearly, but it requires a real effort and time to fully comprehend it.

Honestly I’m not totally convinced I fully get it, and probably therefore still don’t see the need to participate and spend time on it.


I think people are currently in one of two positions:

The first is those that don’t believe Nu should ever auction off NBT for NSR or NSR for NBT. Those people I am not trying to convince, as that argument is a much broader argument that will be proven with time.

The second camp contains people that think Nu should perform share and NBT buybacks at certain points in time. Generally, this camp of people believe there should be a convenient way to do this without the use of public exchanges. I think this group of people will come to realize that my auctions offer many advantages over the traditional blind auction motion that is currently still in place.

The second camp of people is the majority of shareholders because we passed the blind auction motion and still haven’t repealed it. Let me link to earlier in this thread where I discussed the advantages of this auction over blind auctions.

Participants are like players in a game. They have 3 controls over their submission:
What price point?
When in the blockchain?
How much volume?

In the beginning, parameters like ‘when’ are nearly meaningless. By phase 4, however, I think people will be watching the auction address balance like they do exchange charts.


I started writing a reply, but @Nagalim beat me to it. I still want to post the reply. It might help.

Maybe @Nagalim would be better suited to explain this, because he has in-depth knowledge from not only designing it, but implementing it as well.

On the other hand I might be suited well because misunderstandings on my side can help others to develop an own understanding.

So back to my understanding:
the unseeded auction is in a test run situation. That’s why using small amounts is recommended. The software created by @Nagalim is suited to handle the auctions automatically. Participants who send NSR and NBT to the auction addresses have their input factored on the NSR and NBT side of the auction.
At the end of the auction the quotient of the total auctioned amount of NBT and total auctioned amount of NSR determines the price point NBT/NSR.
Participants can trade NSR for NBT or vice versa with other participants.

Participants whose bids (ratio of NBT/NSR) are below the price point, will have less NSR and more NBT after the auction compared to what they placed in the auction. They traded NSR for NBT, because the “market” considered NSR more valuable than the participants being below the price point did.
Participants whose bids (ratio of NBT/NSR) are above the price point, will have less NBT and more NSR after the auction compared to what they placed in the auction. They traded NBT for NSR, because the “market” considered NSR less valuable than the participants being below the price point did.

As soon as this type of auction is held as seeded auction (Nu being a participant), Nu can convert NBT to NSR or NSR to NBT - depending on the liquidity/market situation of Nu.
This could be groundbreaking if it would be held continuously with sufficient participation.
The motivation for non-Nu participants can clearly be arbitrage between the auction and exchanges.
The motivation for Nu is to have an NBT/NSR exchange gateway beyond exchanges


I think the problem is that participants don’t really get anything for themselves out of this except in the sense that it is good for Nu. There is some risk if someone skew the rate and you certainly has to spend time participating.

So I thinks there should be some incentive to get things going if this is really good for Nu.


I don’t understand that risk that originates from that. Can you please elaborate?

As far as I understood it, @Nagalim is creating a client software as well, that can participate automatically.
You can run this just like you can run a TLLP bot.


This is reward not risk. If someone skews the rate you get cheap NSR or NBT.

You are fundamentally right that there is no incentive for participants in an unseeded auction aside from the good of Nu. The seeded auction, however, has clear incentives for arbitrage, as well as general upkeep of the NSR/NBT economy.


  • Auctioneer steals the funds or fails to distribute properly
  • Participant participates wrong and sends the funds to the wrong addresses or otherwise messes up their wallet without a backup
  • Auction ends precisely on participant’s price point. The only loss here is the network fees.


I beg to differ. I see potential to do arbitrage between the auction and exchanges.


yah, but you’re only arbitraging other participants. In the zero sum (well, negative sum because we have to pay the network fees) the auction price is almost always driven to market prices once participants are completely informed. When the seed begins, the auction can start driving market prices and a real opportunity for arbitrage emerges.


OK, re-reading my study results, what I actually thought was that if I didn’t follow the market price when I submit I will be paying for it (someone can arbitrage against me). I guess a price feed could help me always submit at the market price.


I just implemented this last night! Please be wary using the participant software; risk #2: participant malfunction is more real now than it ever will be in the future.

So speaking of the price feed, what’s the best way to do it? Currently, I have implented it as:
nsrprice = btcprice * (current + highbid + lowask + 0.5high24 + 0.5low24) / 4


@desrever may have insight because of the parametric nubt work.

Maybe you could just configure nubot to calculate the price?


I’d love to import the parametric order book stuff eventually, I think that is indeed the correct path. Once we’re pegging the NSR/NBT market on BCE, we should be able to use that code in the participant software.

However, realize that no amount of complex algorithms can predict what an illiquid market will do. I personally expect the auction volume to rival exchange volumes, at which point an external price feed will tell you less than looking at the Tx history of the auction addresses. As a participant, it is also in your best interest to skew your price to reflect your own personal financial state. Making that goal accessible to participants is an ongoing process.