Proposal RIPEMD160 hash: 911a1c622623740eda54a5ac329933a20c7f1111
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Custodial Address: BMuti7RC4P6htnka8FuBXSoppngYXBdVbL
Amount Requested: 1750 NBT
Fund request to operate Liquidbits.net, a liquidity pool for NuBits.
@cybnate will start an independent trustless liquidity pool (TLLP) to provide liquidity on the EUR/NBT, USD/NBT and BTC/NBT markets. A target of 7,500 NBT on the bid and ask side of the order books will be provided by the pool split over 3 currency pairs, resulting in a total maximum liquidity of 15,000 NBT. The operation will end after thirty (30) days.
Liquidity provided by users will be compensated as follows:
with up to ten percent (10%) per month (0.33% per day) on CCEDK’s EUR/NBT pair on both sell and buy side to a maximum of 2,500 NBT ( max pay-out 247,50 NBT)
with up to ten percent (10%) per month (0.33% per day) on CCEDK’s USD/NBT pair on both sell and buy side to a maximum of 10,000 NBT (max pay-out 990 NBT)
with on average ten percent (10%) per month (0.33% per day) per month (0.25% per day) on Bitcoin.co.id BTC/NBT pair to a maximum of 2,500 NBT in total but split as follows:
0.38% per day up to 1250 NBT on sell side ( max pay-out 142.50 NBT)
0.28% per day up to 1250 NBT on buy side ( max pay-out 105.00 NBT)
using the pool’s calculations based on the Dutch auction model to allow a fair distribution of returns amongst liquidity providers. 1,500 NBT of the requested amount in this grant will be held as reserve to make pay-outs to connected users. Pay-outs take place every 24 hours. The minimum pay-out is 1 NBT.
Operations and pay-outs will start within 3 days after the custodial grant has passed successfully. The pool will operate under the name Liquidbits.net.
Fees
The pool fee is 250 NBT and serves as a contribution for the effort of supporting the pool, @creon’s and @woolly’s support and work, supporting the users and the monthly costs of operating the server.
Reporting
After the operation the shareholders will be provided with detailed information about the liquidity provided by the pool. If the target was not reached during some time, or users provided enough liquidity to allow a lower average interest rate, then the remaining funds will be used to continue operations for up to another 30 days or for continuing operations with another grant or a combination of both until depleted.
Discontinuation
If, for some reason, the decision is made to discontinue the pool project after the 30 days term has passed, the remaining NBT from a previous grant will be burned.
Disclaimer and risks
The provisioning of the pool is based on best efforts. No claims can be made by users when the pool server or client software is not available or not working properly.
Liquidity providers remain in full control of their funds throughout the operation of the pool. The pool operator won’t have access to any of the funds hence the reference to trustless liquidity pool. Therefore liquidity providers bear the full risk having their funds on the exchange and won’t be compensated by this pool on an exchange default or inability to withdraw their funds.
Liquidity providers are exposed to the risks of speculators hedging against them on other pairs than USD/NBT like EUR/NBT with the BTC/NBT pair a particular high risk due to its high volatility.
The proposed operation is mainly meant to be a test run. Therefore the provided liquidity is relatively low and I won’t guarantee continuing the operations after this 30 day test run. It is meant to be another test run for the software but also for price discovery (interest %), gauging the interest in fiat liquidity provisioning in order to maintain the NuBits peg with the US$ and EUR, risk assessment and determining a sustainable compensation for the costs of operations and maintenance of the software and the time it takes to operate.
Finally, please be reminded of the following:
Don’t risk more than you can afford to lose!
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Please consider the day rate as a month is imprecise.
