What is the best way to bring volume to ETH/USNBT trading?

JordanLee 2016-05-23 14:53:44 UTC #1

The NuBit market at the moment is principally composed of cryptocurrency traders and arbitrageurs. Ethereum is a delightful feast of liquidity and volatility for our target market. We should meet our customers in the Ethereum trading markets.

I have been spurred to push this forward now by NuLagoon’s initiative to provide ETH/USNBT trading on Tube. Efforts to open ETH/NBT trading (specifically at Poloniex) have been discussed at times in the past. I am hoping that @desrever or @tomjoad can tell us give us some clues about the best way to approach Poloniex based on past interactions with them about ETH/USNBT. It seemed at one point that we were quite close to getting ETH/USNBT trading on Poloniex as we were getting some cooperation from core staff there in moving forward with that. I’m not certain what prevented that from actually coming to fruition, but it might be healthy to re-examine what the barriers were and are there so we can make a good attempt at this point. We also need to consider what other exchanges might be fertile ground for supporting a ETH/USNBT pair. Of course, notable among these is NuLagoon Tube. No doubt that has value, although I am skeptical it is the best use of 20,000 USNBT at this point in time. Even if shareholders did approve funding an ETH/USNBT pair at Tube, we would still want to make an effort to get trading going at more widely used exchanges.

One topic that needs to be discussed is the readiness of NuBot to support ETH/USNBT. @woolly_sammoth or @desrever can you comment on this please? What development, if any, needs to be completed?

Another topic of discussion should be whether it makes sense to provide an incentive to exchanges to support ETH/USNBT trading and if we are likely to get better value from paying NuLagoon Tube or another exchange to adopt ETH/USNBT trading.

Finally, which exchanges provide the best candidates for partnering with us to bring volume to ETH/USNBT trading?

masterOfDisaster 2016-05-23 15:25:10 UTC #2

Trying to look a bit further, I loke to ask: apart from the technical questions (e.g. do NuBot wrappers support ETH/USNBT?) - what types of trading do we want to support?

MLP like NuLagoon?
ALP like NuPool at Poloniex? @desrever, @woolly_sammoth would you feel comfortable running a ETH/USNBT pool at NuPool?
Nu funded operations? What shall we do with proceeds from trading? Convert them to BTC? Create a FLOT ETH group? ETH wallets are somewhat different…

pennybreaker 2016-05-23 15:37:42 UTC #3

IMO, this needs to be advertised from the point of view that there is really only one ETH/USD market (Bitfinex) and it suffers from poor liquidity. This is a real opportunity for ETH/NBT to become a market leading pair, since we have a good solution to liquidity.

Nagalim 2016-05-23 15:39:29 UTC #4

How about a sellside custodian combined with an FLOT ETH group just to get our reserve started? Then, move on to ALP v2.

woolly_sammoth 2016-05-23 15:43:59 UTC #5

In my opinion there are no technical barriers to the use of NuBit on an ETH/US-NBT pair at an already supported exchange such as Poloniex. The wrapper is already in use so we can be confident that it would I’ll work or, at worst, need only a small amount if tweaking. Its a similar situation for ALPv2. The price feed logic already support ETH so a pool could be up and running with very little effort.

masterOfDisaster 2016-05-23 15:53:11 UTC #6

Who would want to buy NBT for ETH without a single place to get the ETH back?
On the other hand NBT can be traded for BTC and the BTC/ETH markets are very liquid.

I’ll sketch a draft for an ETH/NBT operation later - just in case we might get ETH/NBT listed.

Maybe Poloniex doesn’t want to list ETH/NBT to protect the ETH/USDT pairs?
Then again, trade volume is trade volume and fees are fees!
We’d even do them a favour with a sell side only operation: traders need to go trough NBT/BTC and BTC/ETH to get ETH back

edit:
I’ve thought a bit longer about ETH and the start with a sell side custodian.
The Ethereum wallet is so much different from what I already know that I didn’t feel comfortable using it to handle funds not to mention handling Nu funds in multsig.

What about this:
next to a sell side ETH/NBT operation that produces ETH, we might operate an ETH/BTC sell side operation to produce BTC. Those two operations can be handled from the same account, I suppose.
Does anybody know? I mean the proceeds from the ETH/NBT pair are not on order. Does that mean they are available for another NuBot using the same credentials, but a different pair?
@desrever, @woolly_sammoth, does NuBot support the ETH/BTC pair?
That would be a prerequisite for this plan.

If it works this way, those BTC can be withdrawn to FLOT multisig and counted as reserve.
As long as there’s no dual side ALP at the ETH/NBT pair, traders will trade on the NBT/BTC pair, if they finally want to get their ETH back.
Both sell side operations are on the “maker” side and cost only 0.15% fees. At an offset of 0.4% this could work.
What do you think?

Nagalim 2016-05-23 17:21:56 UTC #7

What happens if ETH/BTC comes unhinged? Like if you’re sitting there trying to sell ETH at a reasonable price and the price just keep going down and Nu’s stuck eating the loss? It would be better to execute on ETH/BTC immediately, but that has issues too.

If we aren’t getting an ETH FLOT we should start with ALP v2 instead of sellside gateway.

masterOfDisaster 2016-05-23 17:25:08 UTC #8

Without FLOT one problem remains for dual side operations (one might suppose NBT is pegged to USD on that pair as well!): how do we replenish the ETH side if it gets low?

A sell side only operation is cleaner. Nu doesn’t offer to sell ETH. The peg when selling NBT for ETH can easily be supported.

Nagalim 2016-05-23 17:27:17 UTC #9

ALP v2 doesn’t require us to replenish. The free market will use the ETH/BTC pair for us.

Sell side is suuuper messy without FLOT. The point of starting as sell side would be to develop an FLOT reserve that we can later tie into the Standard and Core.

tomjoad 2016-05-23 17:39:08 UTC #10

My last discussion with Poloniex was approximately six months ago. The contact there, Curtis, seemed to suggest that Poloniex would not institute a NBT base pair without performing “due diligence” on the identity of a few members of the NuBits development team.

The best way to approach them would be if publicly-known shareholders (e.g., @Cryptog, @Sentinelrv, @Ben) were willing to discuss NuBits with Poloniex over Skype or another real-world medium.

In tandem with this, those individuals should visit /r/ethtrader and /r/ethereum to request that traders email Poloniex directly to request a ETH/USNBT trading pair. Our shareholders would explain to those subreddits that Ethereum would benefit from a stable-value base pair for trading, and it would also reduce ETH’s reliance on BTC.

If anyone is willing to undertake this, I will privately provide them with our Poloniex contact’s email address and send an introduction.

masterOfDisaster 2016-05-23 17:52:16 UTC #11

You are suuuper right, but I figure that it will be quite some work to introduce ETH multisig at FLOT. I’d be happy to have a ETH reserve if only for diversification.
Have you ever opened an Ethereum wallet?
Do you understand how to handle multisig with it?
I don’t and for that reason I’m not comfortable using it to handle a lot of money that way.
I don’t know whether it can be integrated into cointoolkit,
Do others have experience with ETH, expecially multisig?
Maybe it’s time to elect some more FLOT members

Would it be possible to get NBT/ETH instead of an NBT base pair without that “due diligence”?
Would they consider starting with NBT/ETH and swapping it after that due diligence?
Do you know if that question was ever asked for the BTC pair?

Dhume 2016-05-24 17:15:12 UTC #12

On the other hand seeing as we want ETH on B&C this might be a good time to start messing around with ETH wallets. From how I understand it multisig is supported already. Maybe we can try with 3 people to get a multisig working for test purposes? I’ll participate