[Withdrawn] Make Firing and Replacing Incompetent Liquidity Providers Our Top Priority

[NuWorld]

About tier 5, all I can say is what I’ve said before, that I was recently planning on parking NuBits, but decided against it because I’d most likely lose money trying to cash back out at $0.95 cents. I’m sure there are others like me. @Dhume thinks that tier 5 may just not be attractive in a BTC bull run. I personally would have rather parked than put my money in Bitcoin. I have no idea when the bull run will end and could end up losing money because of not timing it right. With parking, at least I know I’m going to get a specific amount of NuBits back as long as the peg is being tightly held.

Would you find the current park rates were attractive if at random times, once a day the peg were at 0.99 and the rest of the time there was no peg? Would you be confident that when your park time was up you’d be able to sell when the peg was in force? Or would you be worried you could end up losing money because of not timing it right? That is what Jordan is proposing.

We didn’t raise rates high enough to be attractive.

If raising rates were sufficent, and if nu shareholders had raised rates high enough to be attractive, the FLOT wouldn’t have run low on reserves in the first place.

[mhps]

@masterOfDisaster,

When was the idea of widening the spread above 1% SAF to keep the (degraded) peg validated? I remember seeing your post about it. When was it? What feedback did you get?

Was the spread widened above 1% SAF at this time on your gateways?

When was the spread widened above 1% SAF after April on your gateways? When was it first reported in the forum?

Stick to the fact please.

[NuWorld]

I’m voting for 75%+ APR park rates. That way, even if the offset doesn’t get changed in the near term - there is still profit.

Excellent Idea, I encourage other shareholders to do the same. Nu has held a 95% weakened page for 10 days now, if people believe that they can buy Nubits for under a dollar, sell them for 95 cents and earn enough interest to make up for that loss and provide them some profit, there is a chance they will. We should encourage parking for a long enough timeframe to have worked our way out of the immediate crisis (1.5 to 3 months)

[NuWorld]

For those advocating extremely high interest rates, Park rates, this does nothing and only exacerbates the issue of insolvency.

High rates are only a problem if there is still a crises when the park time is up. High rates at a very short duration (days to a few weeks) will probably make the situation worse, high rates for park periods of several months have a good chance of helping.

[nmei]

I agree - High rates lead to inflation - which leads to more coins on the market Nu has to account for in the long run. However, if the liquidity comes back we will be in a better situation in the future.

Up front members should park now at “reasonable” rates to help save Nu. But to draw more liquidity from outside we need a carrot.

[mhps]

Plan

I replied here

basically there is no advantage of pushting all buy fund to NLT if all exchanges are set to <1% SAF.

and

Get NuBits' liquidity flowing

Jordan’s idea of extracting value from NSR as if there is no tomorrow may scare most investors away permanently. We have been discussing gradually closing the spread using existing T4 and NSR sales. Since there seems to be an agreement that on-off tight peg is still very effective, we can for example

1. use limited fund to close the spread to <=1% SAF
2. observe how fast it is broken,
3. commit most of our T1 fund to where the selling stops
4. replenish T1 with existing T4 and NSR sales. the amount is limited, approximately equal to that lost in the first 2 steps
5. do step 1 again after some interval or trigger
6. until the spread is not broken again.

Isn’t this a better path ?

[crypto_coiner]

Would you find the current park rates were attractive if at random times, once a day the peg were at 0.99 and the rest of the time there was no peg? Would you be confident that when your park time was up you’d be able to sell when the peg was in force?

I must admit: no

[crypto_coiner]

Go away. I’m in this to win.

What is your vision for Nu – any projection and roadmap?
For example - in 2020:

• nubits in circulation: $10b
• nushare market cap: $1t (with 10b NSR)

[crypto_coiner]

I must admit – the peg is currently broken and I would not use NBT for payment settlement nor for parking, as long as I know that US-NBT does not tether very closely (-+1%) the USD.
I am willing to give it a try to this motion, for lack of an alternative.
Will add this to my data feed

[NuWorld]

Would you find the current park rates were attractive if at random times, once a day the peg were at 0.99 and the rest of the time there was no peg? Would you be confident that when your park time was up you’d be able to sell when the peg was in force?

I must admit: no

I wouldn’t either. So if you wouldn’t, and I wouldn’t, why do we think anyone else would? But this is what Jordan is proposing with his motion. Here is what he says earlier in this thread:

Let’s say we restore the peg and tier 4 is completely cleaned out. That is a real possibility. Improvement in the functioning of tier 5 (park rates) will take days or weeks of restoring the peg. So, if we end up with an empty tier 4 right away, we can’t use tier 5 right away. So we use tier 6. We say we are going to sell x number of NuShares each day to get funds to buy NuBits at 0.995. So, in this hypothetical narrative, we have zero tier 4 at a moment in time, but everyone knows it will be refilled from tier 6 each day. Some NuBit holders may choose to sell when there is no wall. Speculators will set a price according to the probability they think they can sell NuBits for more later. Let’s say a speculator says, “Hey, I will buy NuBits for 0.90 because I think I can sell them the next day for 0.995 with new funds from NSR sales are placed on the order books.” That may work, or he may need to try in subsequent days if other sellers beat him to the limited liquidity on a particular day.

[mhps]

Here is what he says earlier in this thread

In the part you quote he said how keep selling NSR can restore confidence of the peg. Its relation with T5 is the next line which you didn’t quote

Meanwhile, as this pattern repeats, tier 5 begins working, because potential parkers begin to have confidence that can sell their NBT for 0.995 when it unparks. This means we can keep the peg a greater percentage of the time.

[crypto_coiner]

Some NuBit holders may choose to sell when there is no wall. Speculators will set a price according to the probability they think they can sell NuBits for more later. Let’s say a speculator says, “Hey, I will buy NuBits for 0.90 because I think I can sell them the next day for 0.995 with new funds from NSR sales are placed on the order books.” That may work, or he may need to try in subsequent days if other sellers beat him to the limited liquidity on a particular day.

I dont get what he is demonstrating here – but that is not in the motion body

[NuWorld]

In the part you quote he said how keep selling NSR can restore confidence of the peg. Its relation with T5 is the next line which you didn’t quote

Meanwhile, as this pattern repeats, tier 5 begins working, because potential parkers begin to have confidence that can sell their NBT for 0.995 when it unparks. This means we can keep the peg a greater percentage of the time.

Yes, and I don’t see how the pattern of speculators all trying to sell as quickly as possible in the rare minutes the peg is in force is going to give people confidence that if they do lock up their funds by parking them that when they unpark they will somehow be able to get in front of the speculators (who didn’t lock up their funds and are always fully liquid).

The last sentence you quote reinforces my original point. Jordan says “This means we can keep the peg a greater percentage of the time.” Would you (or anyone else) be confident that when your park time was up you’d be able to sell in the percentage of the time when the peg was in force? Because if not, this isn’t a plan that will kickstart tier 5 (park rates)

[NuWorld]

I dont get what he is demonstrating here – but that is not in the motion body

The motion body is mostly a tirade, but it says “Jordan Lee may appoint and compensate successors to the fired liquidity providers” Which I take to mean he will appoint people who agree with his vision. It also says “Tier 4 funds should be offered at a tight spread, even in the most heated crisis. If anything, tighter spreads can help increase NuBit demand when NuBit demand is low.”

The post I quoted is Jordan explaining what he expects will happen if the motion passes.

[mhps]

the pattern of speculators all trying to sell as quickly as possible in the rare minutes the peg is in force

1 The speculators are the natural floatation force to sell at a high price, hence helping the buy side to get higher. They usually have bots 7/24. As long as there is chance to see <1% spread, there is business. So our job is keep giving the chance.

2 When BTc starts to fall or just stops having its upward momentum, people start to think of buying nubits or postponing selling if they know there exists chance to sell at $1 later. There will be increased chance (“a greater percentage of the time”) the peg is maintained.

3 Once the percentage is 100% or can be offsetted by park rate reliablly, T5 kicks in.

[Sentinelrv]

It seems to me that Jordan is not going to change anything in the motion. While I don’t like firing anyone and don’t think it’s necessary in this case, it can always be temporary as shareholders can hire them back in the future.

My main concern now is that we’re running out of time to act. I was persuaded by Jordan’s plan in the post linked below and I’m choosing to put my hopes in the possibility that he truly knows what he’s talking about. I change my mind and will vote for this, unless a better alternative pops up that has a chance of passing.

I had been warning about suicidal tendencies swirling around the forum for some time. We need to identify exactly what behaviors these are and reject anyone who defends those behaviors. Voluntarily breaking peg with a fully functional tier 4, tier 5, and tier 6 is suicidal. There is no reason to do it. It destroys confidence. It destroys tier 5 and tier 6. The solution at this point is to return to the model that was so carefully laid out. We can restore the peg. It is already too late to ke…

[mhps]

My main concern now is that we’re running out of time to act.

2 When BTc starts to fall or just stops having its upward momentum, people start to think of buying nubits or postponing selling if they know there exists chance to sell at $1 later. There will be increased chance (“a greater percentage of the time”) the peg is maintained.

Note that this above step only works when bitcoin runs out of steam. If btc price keep rising, NSR selling cannot win.

Step 1 in my post is true always.

Therefore we are not running out of time. We should start closing the spread gradually to save our resources and be ready to make significant improvement after btc trend reverses by commiting major respurces to realize 1% spread 100% of the time.

[Sentinelrv]

I replied here

basically there is no advantage of pushting all buy fund to NLT if all exchanges are set to <1% SAF.

Can you explain what SAF means please?

[mhps]

what SAF means

Spread After Fee.
if the exchange fee is 0.2% both ways, an absolute 1% spread is 0.6% SAF.

Sub-1% SAF doesn’t work because of wall-collision problems.

[cryptog]

I must admit.
I did not realize the crucial importance of a very tight peg if we want T5 to work properly.
As a member of FLOT I did sign transactions to replenish the buy side of gateways working at large spread.
Afterwards, I do think it was not the right course of actions to take since it harmed the peg by decreasing its quality.
Although my mind says that liquidity at tight peg is everything, i was reluctant to using T6 because it meant dilution.
In the model proposed by jordan lee, 0% reserve, which seems to be most compelling and simplest, shareholders must be ready to dilute their holdings in bad times. They must be also ready to see their shares shoot up in value if Nu makes a lot of sales.
In this model, centered around liquidity, T5 is here to delay the use of T6.
T6 is here to create new funding if really necessary.
T6 funds unlocking or creation will be possible as long as some people want a piece of the voting system that Nu represents.
As i mentioned already, i think i bear some responsibility as a member of FLOT.
I am fine with being replaced.
I am fine with this motion in principle.