[Passed] NuPool 5

NuShares Passed Grants
#1

Hello fellow friends of Nu,

The good news first: With our reduced liquidity targets in the current operation (from 50,000 NBT to 30,000 NBT) we had quite some competition on our pairs and saw rates < 0.2% quite often.
This is a good sign, as this was the first term in which competition really commenced on our NBT/BTC pairs on Bittrex and Poloniex.
We’re currently working on a graphical analysis, showing the current rates over time, to make this fact more visible.

Of course, we as operators and shareholders are happy that the actually paid rates are decreasing for NuNet.
On the other hand, we received some complaints from our users, though various channels, that they want to provide more liquidity for Nu as they found this kind of investment profitable for themselves.
Speaking about profitability, we know about the current BTC price swings but don’t think an increased payout rate is needed, because we are confident that providing liquidity with the current max rates (0.3%) is still a profitable game in the (relative) long term.

As a compromise, we want to propose to keep our current rates (0.3%) but raise our liquidity targets back up to a total of 50,000 NBT.

Given the looming protocol 2.0 switch over we would like to investigate using NSR as a payout in our next operation. That will require some modifications to the server software though which isn’t ready as yet. For this coming operation we will stay with NBT as the reward mechanism. We also want to look at diversifying the exchanges supported by NuPool to ensure a greater Nu presence across the supporting exchanges/pairs. As the NSR change will be a major one it makes sense for us to continue in our current vein for this operation and make changes when the software is ready and tested.

Due to time constraints outside of Nu, the fourth operation period has over run. There is a little under 215 NBT remaining in the pool fund. We propose to start the next operation when this proposal is posted. Running at full target that would allow the pool to operate for 1 day. Recent payouts have been in the range of 50-60 NBT per day though so we should see more like 4 or 5 days which is hopefully long enough for this proposal to pass. Should the worst happen and the grant doesn’t get granted before the funds run out, we will stop the server until it does. Any rewards earned will be paid manually when the grant is granted and the server will be restarted. Apologies for this state of affairs. Tighter control will be kept on the operation in the future.

Here are the grant details for the next operation:

Proposal RIPEMD160 hash: a4787e0fd9e234a83e1170a2751ad7f5a070fba5

=##=##=##=##=##=## Custodian Hash starts with this line ##=##=##=##=##=##=

Custodial Address: B4j5RX8qaMLwfNF5o3UkXt5B7GNtDUhXbM
Amount Requested: 4788 NBT

NuPool will continue operation on Poloniex and Bittrex for another 30 days. The total target of the operation will be 50,000 NBT split equally between the two sides of the two supported exchanges.
All other Pool parameters will remain as they are.

The pool reward will stay at 0.3% per day which translates to 9% per month

The figures are:

Duration: 30 Days
Daily Rate: 0.3%
Total Rate: 9%

Poloniex: 25,000 NBT > 12,500 BID | 12,500 ASK
Bittrex: 25,000 NBT > 12,500 BID | 12,500 ASK

Server Tolerance: 0.0085 or 0.85%

Grant Amount: 50,000 x 9% = 4500 NBT
Pool Fee: 50,000 x 1% = 500 NBT

Amount Rolled Over: 212 NBT (after last payout of operation 4)
Total Grant Requested: 4788 NBT

=##=##=##=##=##=## Custodian Hash ends with this line ##=##=##=##=##=##=

Verify. Use everything between and including the <custodianhash></custodianhash> tags.

TLLP Development:

  • We are happy to hear your thoughts on the partial redesign of NuPool.net. @Willy has been hard at work reformatting the data from all TLLPs.
  • The Cryptsy wrapper is undergoing final testing and is nearly in the wild
  • The SouthXChange wrapper is currently being developed by @TheCrema and is getting tested as we speak
  • The tighter integration with NuBot 0.3.* is still underway. Holidays have meant that development was slower over the holiday period but it is hoped that it will pick up again now.

Thanks,

Sammoth and Willy

#####edits: forgot to subtract remaining funds from grant total

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[suspended] Cryptog's Nu data feeds - BETA
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[Discontinued] Cybnate's Nu datafeed - BETA
#2

Great news, I’m happy to see this.

I don’t support providing NSR as compensation because the liquidity in that market is so low. A small NSR sell-off can damage the share price considerably. If NuPool users prefer receiving NSR as compensation, I would hope that they choose to sell their NBT and purchase NSR on the open market. As a shareholder I also oppose further dilution to my shares for any purpose other than emergency peg maintenance. In my view NBT are the most appropriate asset to pay liquidity providers with because it has a stable value, which is desirable when calculating monthly network expenses.

Voted. NuPool has been doing a great job so far and is an important part of the Nu network!

2 Likes
#3

Thanks for the reply @tomjoad and a very valid viewpoint. I’d be interested in the views of other shareholders around the potential of NSR as payment. I raise it now as the Protocol change allows NSR grants and it was very much the perceived direction that was planned out for the TLLPs when NuPool had it’s first operation.

I’m inclined to agree with your comments around avoiding unnecessary share dilution and it does seem that the burden of excess NuBits being bought into creation to fund the pools hasn’t plaid out as some had feared.

I feel it would be prudent to tailor the TLLP software to allow for NSR payouts though as then the option is available to us should the need arise.

1 Like
#4

voted

#5

voted

#6

Based on a quick glance at charts, it appears the average daily volume over the last month at Bittrex was around 5,000 NBT while the average daily volume at Poloniex was around 25,000 NBT. So, I’m not inclined to pay the same amount for liquidity in these two markets. Poloniex should be funded at a higher level, it appears.

I’m very glad to read that rates were often below 0.2%. This shows us that the cost of providing liquidity is indeed dropping. A key factor in that drop will be to limit the amount of liquidity paid for. While 50,000 in liquidity is 67% more than 30,000, we can expect to pay even more than that difference because the average rate given will be higher with a 50,000 target.

It is always a balancing act trying to keep costs down but still provide a quality product that will attract more business. While I admit making return on investment calculations on liquidity provision is very difficult, I suspect we won’t get a return by increasing liquidity at Bittrex at this time. Poloniex, as I have mentioned in a new thread, is an entirely different matter.

Therefore, I would be supportive of increasing the liquidity on Poloniex to 25,000 or even 35,000, but I prefer to see Bittrex liquidity levels left as is at 15,000 for now. Of course, this could change if we see volume pick up at Bittrex.

At the 35,000 and 15,000 levels, we would be spending 43% as much on Bittrex as on Poloniex, even though Bittrex only gives us 20% as much volume. So even that spending ratio is generous to Bittrex.

What does everyone else think about the relative levels of liquidity we ought to support?

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#7

I would support that. Poloniex is quickly becoming a primary exchange for non-Bitcoin trading. @woolly_sammoth and @willy are there any operational concerns on your part from placing a higher proportion of liquidity on Poloniex?

1 Like
#8
#9

That makes sense. Rewarding better liquidity provision that contributes better to trade volume is natural, I feel.

1 Like
#10

I think NSR grants could be needed in the following situations:

  • we want to get the contribution from someone who would work only if she or he gets some shares.
  • we need to protect the peg
1 Like
#11

No operational concerns as such, we thought to keep the target relatively high on Bittrex to try and attract some volume there to avoid being delisted. Given the current balance of Liquidity though, it may be more prudent to compensate accordingly.

#12

Supporting this and adding it to my datafeed. Not too concerned about supporting Bittrex, Not having a single market is important to spread the risks regarding exchange defaults.

I do struggle a bit with the large amount/percentage NBT/BTC liquidity I’m paying for as a Shareholder.
I hope NuRiver will contribute to a change on the NBT/USD pair on Cryptsy and I’m also intending to increase the size of the fiat pairs in my pool. Will post a draft this weekend.

4 Likes
#13

I suspect the funding for Poloniex isn’t controversial at all, while the added funding for Bittrex has some level of controversy. It would be unfortunate if Poloniex liquidity wasn’t funded because some shareholders were opposed to increasing the liquidity on Bittrex. One way to avoid this outcome would be to make your funding more granular. Multiple custodial grants could be requested to allow shareholders to speak more precisely on what they support and what they oppose. You may request one grant to support 25,000 on Poloniex and 15,000 on Bittrex, which isn’t controversial. Then you could ask for a separate additional grant to support an additional 10,000 in liquidity support on Poloniex and a third grant asking for an extra 10,000 in liquidity on Bittrex.

2 Likes
#14

This creates more overhead on the one hand, but on the other hand it’s easier to form consensus on what a majority agrees upon and move controversial parts which might not find consensus to a separate decision.
Very well!

#15

You mean blockchain space? Can we get an idea how much block chain space is taken up by a vote? Like, assume 100% of the network begins voting for a motion all at the same time for 10,000 blocks, then all 100% stop immediately. How much extra blockchain space does that take up?

#16

That as well, but I was more thinking of the administrative overhead dealing (arguing, voting) with 4 grants instead of 1.

Each block would carry 0 to 4 grants instead of 0 to 1 (in this case). I don’t know how much space a grant vote requires, but it shouldn’t be very much.
For a grant to pass the minters could stop after 5,001 blocks (if 100% start voting immediately).
So the absolute minimum space required for a grant to pass is 5,001 blocks * custodial vote size.
With up to 4 parallel grants it’s 4 times that value.

#17

Do you know what this is? Like how many bytes?

I think that the overhead of arguing is actually less if we split it up into 4. The actual voting process is of course more messy, as people can get confused what each grant is for.

#18

While it is possible to calculate an exact historical average for the amount of space taken up by a custodial grant vote, I would bet it is between 150 and 300 kilobytes.

I expect at some point in the future we will use a variant of the mini-blockchain employed by Cryptonite. This will mean the typical shareholder will not hold old custodial grant votes on their blockchain.

3 Likes
#19

a4787e0fd9e234a83e1170a2751ad7f5a070fba5 verified.

voted!

#20

Good evening everyone.

Just a short update. The rolled over pool funds from the 4th operation ran out and we were at risk of not being able to pay pool compensation. Instead of turning the pool off until this proposal passes, @willy has added personal funds to the pool to ensure continued operation (thank you willy).

Having looked at the situation with the unbalanced volumes on the supported exchanges, I can see that it is something that needs attention. I was perhaps a little rash in starting the the 5th operation of NuPool before garnering full opinion from shareholders but, as this proposal is being actively voted on, I am loathe to change the parameters presented in it.

I was happy to see that @henry has stepped in to help by supporting Poloniex with the NuLagoon and do think that NuPool should assist if it can.
The only way I can think to do that, while leaving this proposal intact, is to submit a second grant proposal to fund an increase in target at Poloniex. An increase of the target at Poloniex to 35,000 at the current rate would cost 900 NBT. Do shareholders think that this is a valid use of funds at this time or is the feeling that the support of the NuLagoon is enough to last the next 27 days and to re-examine the targets on NuPool then.

Again, apologies for jumping the gun and starting this operation prematurely (although actually late). As stated in the OP, I will do my best to be more focused from now on.

Sammoth

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