[Withdrawn] Make Firing and Replacing Incompetent Liquidity Providers Our Top Priority

[jooize]

Now, if the 2 spreads are equal say at 5% does that make nbt pegged and tethering 1usd?

Not at $1.00, but $1, yes.

There is one spread (e.g. 1%), and two offsets (in that case 0.5%).

[JordanLee]

Or we maintain the 0.95 cents peg (which you don’t see as a peg at all) and wait out the storm

With your plan we have no tier 5 and tier 6 is impaired. Who will want to buy NBT for 1.005 when we only buy them for 0.95? So NuBit adoption will never pick back up. Buying for 0.995 or 0.99 is the only way out, I believe, of the mess created by abandoning the peg.

Dilution of NSR isn’t what matters. The price matters. The market has rejected what we have been doing recently by pushing the price down. We will have liquidity for buy side so long as the NSR price is not zero. We just have to find out whether people will let it stay at zero or not. As long as we present a credible plan to recover, I don’t think it will stay at zero. If shareholders are upset about dilution, perhaps they should ensure the peg is not abandoned again, because that is the source of the dilution. If a number of people buy 100 million NSR for 100 satoshis and they save the network and peg by so doing, they are our heroes. They deserve their windfall profits when things improve. If we don’t dilute, the NSR price goes to zero or near zero anyway.

The only way out is a credible plan to restore the peg. The sooner we do it, the easier it will be.

[ChrisS]

The fact is, NSR was not a reliable source to maintain the peg. is there a motion to suggest when the selling of NSR would occur with relation to the available buy side? Clearly it would be imprudent to wait until the last minute, a buffer zone would be needed. I am not confident that the selling of NSR at this moment would be sufficient to providing liquidity to the peg.

[masterOfDisaster]

The only way out is a credible plan to restore the peg. The sooner we do it, the easier it will be.

It’s not that I haven’t propsed an extraordinary NSR sale recently (in addition to the sale based on “Core and Standard”).
Unfortunately I’m busy with fighting your strange accusations, otherwise I’d have already organized making a new FLOT NSR address.
But I will do that soon and draft an NSR grant.
Unless you beat me by bringing the FLOT NSR pubkeys in a different order so that our privkeys still work, while the multisig address will be different (the current NSR FLOT address can’t be used for grants again).
Will you finally start supporting it, or are you busy with slinging mud?

Or why don’t you just make a grant with a singlesig address you control?
…like in the good old times…
I mean, shuffling the NSR FLOT privkeys is not more effort, but…
…I leave it to the readers to come to their own conclusion.

[JordanLee]

Do you think you have sufficiently distracted the readers from the real reason: the BTC reserve was that low?

Its clear reserves should be higher than they were. Steps are being taken to raise reserve goals through motions. I didn’t author the current regulations on reserve levels but I admit I didn’t steer them higher.

However, I am absolutely certain low reserves did not break the peg. Setting asymmetrical offsets did. We had plenty of capacity waiting in tier 5 and tier 6, but your asymmetrical offsets broke those tiers. That is the problem here. Remember, this is a liquidity engine, not a reserve based model. Our goal should be zero reserves, after the liquidity engine is robust enough. The health of the liquidity engine is what is of paramount importance, not the size of our reserves. Our liquidity engine was broken by those that set asymmetrical offsets. Fixing the liquidity engine must be our first priority.

[jooize]

I’m convinced. I don’t see how it can work any other way.

Get NuBits' liquidity flowing

Nu provides liquidity for US NuBits. Buy-side liquidity is low. Faith in Nu and NuBits depends on liquidity of NuBits. Our actions until now have been to widen spreads, set Park Rates, and sell NuShares, while keeping some buy side funds (currently 39.74 BTC). Actions that should be taken according to @JordanLee. Push all remaining FLOT funds into buy side at tight spread. Set appropriate Park Rates. Advertise Park Rates. Sell NuShares and push proceeds into buy side at tight spread. Gr…

I want work done on advertisement of Park Rates. A simple to understand message presented well.

NuBits can work. I think many believe that. We need customers and new shareholders.

I don’t know how much time we need and which Park Rates are appropriate. Please focus on figuring that out. I believe we don’t have a choice.

[mhps]

Dhume:
Or we maintain the 0.95 cents peg (which you don’t see as a peg at all) and wait out the storm

With your plan we have no tier 5 and tier 6 is impaired. Who will want to buy NBT for 1.005 when we only buy them for 0.95? So NuBit adoption will never pick back up.

We have been discussing plans to restore the peg to 1% spread from 5% spread. The idea is gradually tightening it with current T4 fund and NSR dilution fund as BTC buy pressure receeds. It is also

a credible plan to restore the peg.

[masterOfDisaster]

I didn’t author the current regulations on reserve levels but I admit I didn’t steer them higher.

Others steered them higher e.g. @Nagalim

I am absolutely certain low reserves did not break the peg. Setting asymmetrical offsets did.

Thank you for your continued propaganda and false beliefs.
Low reserves were the reason the buyside offset had to be increased.

Will you eventually answer the question I asked so often, but am not aware or an answer:
what would have happened to the peg once the last BTC had been gone?
Tell us!
Better or worse than $0.95?

I provided data about how fast BTC were traded in the tight spread operations (ALP, NuLagoon Tube, @Cybnate’s PyBot, @zoro’s NuBot before he increased the buyside offset following a FLOT request) and that this couldn’t have been sustained for long.
You say you are certain. No more data. Strong argument!

You are not acting credibly. You are wasting our time. Once I find time I’m going to care for what you could as well, but you are busy with making pawn sacrifices.
Just in case you want to help; one more time:

• alternate the order of FLOT NSR pubkeys and make an NSR grant. The remaining NSR won’t lasr long
• make a proposal for a NuBot operation at Poloniex, that runs at a tight spread (each side <0.5% offset) and doesn’t use parametric order book

Otherwise I will create the NSR grant and make a proposal for a NuBot with these parameters.

I don’t give up Nu easily, no matter how hard you fight to plummet the NSR rate.

[JordanLee]

Some here are asking why I didn’t raise a stink like this before, while others are condemning me for being this direct at all. I have been carefully pointing out how tier 4, 5 and 6 were being under utilised all along. In others words, don’t drop the peg, use tier 4, 5 and 6. I did so quite politely. So I have been trying to right the ship all along, but I have been critised for not doing it forcefully enough.

The polite approach didn’t work so I am trying something more direct.

What people need to realise here is that a reserve based model won’t scale and is subject to counterparty risk. It just won’t work. Our model is a liquidity engine. We have reserves at this point in our history, and we should have more at this point. But if you try to solve this problem from the perspective of keeping reserves or building them up, I don’t think it will work. You have to focus on the functioning of the liquidity engine, which has recently been broken.

[jooize]

I don’t give up Nu easily, no matter how hard you fight to plummet the NSR rate.

How do you imagine Nu can recover? I feel as I’ve understood @JordanLee’s idea, and don’t see what the long-term plan can otherwise be.

Can you spell out suggested steps, or point me to where it’s been described?

[Chronos]

Tell me, how many parked NBT are from BCE funds?

I’d like to know this as well.

[masterOfDisaster]

In others words, don’t drop the peg, use tier 4, 5 and 6. I did so quite politely.

The friction of T5 and T6 is too high to serve T4-T1 fast enough.
You really have only a clue about liquidity provision in theory, but not in practice, do you?

But I appreciate the tone of your last post. So much less of an agressor. Will that be the next attempt: make me the reason for the rough tone as welk as the reason for the weakened peg.

Oh yes, I say weakened.
The peg in NBT/USD was fine all the time.
It was the synthetic peg in the NBT/BTC that followed economic principles by some degree - supply and demand, you know? - to support what was left of the peg.

@JordanLee, might we please have a report of the BCE development funds - addresses, balances, stuff like that.
I just want to make sure I make a grievous mistake considering some of them might have been dumped into NuLagoon.
As you already made a call for slaughtering me, you can very well put that on the list if accusations: asking for a report in an inappropriate way.
I could have held back with the reasoning, but I wouldn’t know why.

[masterOfDisaster]

Can you spell out suggested steps, or point me to where it’s been described?

Doing the obvious:

• increasing the park rates
• granting way more NSR and selling them for BTC or NBT
• keeping the buyside from running completely dry

The last point is important.
If we consider the peg failed, we can as well buy cheap NBT (increased buyside offset), reducing the liabilities of Nu.

[teek]

I have been quite inactive but i’d like to offer my two cents.

If T5 and T6 friction is too high, the problem that needs to be fixed is that friction.

The idea of “reserves” don’t matter. The answer to “what would happen if we ran out of reserves” is sell NSR at whatever price. The price of NSR does not matter either. The whole idea hinges on the network as a whole will rise up to liquidity challenges and those that rise up will be rewarded for their efforts.

It makes it very hard to rise up and defend the peg when there is no peg to defend. No 0.95 is not “the peg”. If i feel this way as a very early member, i can only imagine what newcomers must think that haven’t observed this whole time and have no ties whatsoever to Nu. This is a huge huge huge hit. One that may never be recovered…

[JordanLee]

what would have happened to the peg once the last BTC had been gone?

I have explained this multiple times in this thread. Please read above.

[JordanLee]

If T5 and T6 friction is too high, the problem that needs to be fixed is that friction.

The idea of “reserves” don’t matter. The answer to “what would happen if we ran out of reserves” is sell NSR at whatever price. The price of NSR does not matter either. The whole idea hinges on the network as a whole will rise up to liquidity challenges and those that rise up will be rewarded for their efforts.

It makes it very hard to rise up and defend the peg when there is no peg to defend. No 0.95 is not “the peg”.

Exactly. This is perfect.

We must have buy orders up at 0.99 or more. The sooner the better. Please liquidity providers, do this now. Now.

[jooize]

I have many questions. I’m tired from today’s personal activities, so I apologise if I’ve confused something.

Park Rates cannot be effective unless customers believe they will be able to cash out without losing their profits into a wide spread. Do you agree?

Do you want nothing or part of liquidity at tight(er) spread?

I understand you want funds supporting a degraded peg? Why? For marketing basically? For revenue from those who find it worth the premium to exit NuBits (similar to RNA?)?

Customers will in worst scenario have to wait for NuShare sales to fill their order in any of these cases. This is unavoidable if liquidity runs out, which many but not all assume it will.

[JordanLee]

Park Rates cannot be effective unless customers believe they will be able to cash out without losing their profits into a wide spread. Do you agree?

Yes. This is why a degraded peg can’t work. It nearly completely destroys tier 5 and impairs tier 6, while leaving tier 4 under-utilised.

[jooize]

Everything to Poloniex at once? Is there in your opinion any reason to withhold any liquidity?

Should we spread the liquidity across exchanges, or is that not important or useful?

@FLOT: Do we have gateways at 1% or 2% spread?

2% spread equals 1% offset, which results in $0.99 and $1.01, correct?

[JordanLee]

Everything to Poloniex at once?

The only reason not to do that is if we weren’t prepared to turn on the NSR sales quickly. We have to be prepared to refill tier 4 quickly with NSR sales. FLOT, can you help us there and tell us what you are prepared to do?

An intermittent peg is better than none at all. But I don’t accept that we will have to have an intermittent peg at this point. We might just be able to keep continuous liquidity up.

To me, the biggest key is we have to convince NuBit holders that we will defend the peg with everything we have, forever, from this moment. NuShare holders must take the hit. That is what we said we would do.