[Withdrawn] Make Firing and Replacing Incompetent Liquidity Providers Our Top Priority


#263

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.


#264

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.


#265

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.


#266

Can you explain what SAF means please?


[Passed] 1% Maximum Spread in Shareholder Funded Liquidity Operations
#267

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.


#268

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.


#269

You are ware that liquidity wise this motion:

would have lead to the same result, if it were extended to existion operations?

Maybe I pissed Jordan off with that, which pulled support from his motion:

Jordan’s focus was no longer on adjusting the liquidity provision according to his vision, he needed to move me out of his way.
For that reason he didn’t try to push his 1% spread motion, but decided to start a witch hunt.
He successfully managed to make me the one who’s guilty for Nu’s situation, although the buybacks played the key role.
This witch hunt has the secondary benefit, besides getting me out of the way, to create a lot of uncertainty. It’s in favour of his desire to get more control back, shape Nu according to his vision instead of letting Nu being formed in a decentralized way.

You’ll never find out how many NSR he sold back then and whether he or people he collaborates with, dumped on the buy side on 2016-05-27 to start all this panic.
I’m sure he’s clever enough to have obscured all sufficiently. He won’t even try to counter this accusation.
You’ll never find out how many NSR he still has, but the support for his 1% spread motion was amazing with such a high SDD. Keeping the NSR ready with a good amount of coinage makes using them.
With faster motions [Withdrawn] Faster motions this would be even more effective. Alas, that motion didn’t pass.

Jordan does his best to undermine the current decentralized organization beyond direct shareholder control. FLOT will either be too slow or fall apart. Jordan will offer his services. He makes you believe in the “Liquidity Engine” dream.
Why is there no accounting that shows the NAV of the operations from January 2015, when Nu had so much trading volume?
I wonder, how much it cost to buy that volume.
The thing is: trades on exchange make no revenue for Nu. An increased offset of NuOwned operations could, but that’s bad, I’m from the dark side. Sorry for messing with the liquidity engine.
But in one way it’s an engine: it consumes gas. The NAV gets decreased by this engine. It lead Nu, where it is now.

Where economics 101 don’t work and blind belief replaces ratio, I can as well stop arguing or explaining what I did.
You don’t want to listen and understand, that ALP and NuLagoon were almost instandtly depleted on buyside because of the tight spread, do you?
You don’t want to see that the same happened to @Cybnate’s PyBots.
You don’t want to realize that the same would have happened to the NuBots of zoro and me, if not for an increased offset.
It was often said that one could not know, whether BTC swings up or down; that it’s not given, Nu loses money in liquidity provision from that. That might be true, but

  • Nu buys BTC when everyone wants to sell them
  • Nu sells BTC when everyone wants to buy them

If the market has no clue about trends, why are the buyside reserves almost empty?
Nu is always on the losing side of this trade. Market aware offsets for BTC/NBT and a tight peg only for NBT/USD could mitigate that.
But that stalls the liquidity engine right?

It’s easier to follow the topsyturvy logic from Jordan, because it allows you to continue with this belief.
All that’s required is to make someone guilty of the situation. Don’t ask about buybacks. Put the blame on me. I can take it. If sacrificing me helps you continuing your belief and your efforts, do it. I gave a lot for Nu. I can give all.

Follow the leadership of Jordan. He will offer service in liquidity provision. Better ask of precise accounting and NAV. Be careful that this is no dump&pump of NSR - the order of dump&pump was chosen with a reason.
I wish you the best. May the liquidity be with you!


#270

And you put a blind eye to the fact that T5 wasn’t working when the peg still was tight.
T5 suffers from Nu being close to bankruptcy. The course to bankruptcy was set by the buybacks, not by the emergency mode buyside offsets.

You don’t realize that this motion isn’t required to sort liqudity provision out, but to create fud, undermine FLOT, get rif of me?

This motion would have done - if shaping liqudity provion would have been the goal:

FLOT would at any time have followed good arguments to adjust parameters.
There were no good arguents. They had to be made.
This is how arguments are made. Make someone guilty, me, FLOT, anybody and finally get through with what has no sufficiently good arguments.
This is not economics, it’s politics.
Have fun with Jordan!


#271

There are 3 reasons that I listed above why that could have been our fault. Maybe they wouldn’t have worked at all no matter what we did. Maybe they would have worked if we had done more, preventing all this in the first place. We may never know.


#272

You are over nevous @masterOfDisaster, You’ve contributed a lot to Nu and maintain strict pegging for long time and only test loose pegging of 5% spread for one week.

Only insane people will believe you are the reason of NSR cap 40% loss, so take it easy, the fault belongs to the whole shareholders, not a specific person. Don’t overestimate youself in any direction, bad or good.:wink:

NSR may loss 80-90% cap in coming days, prepare for it.


#273

What I am thinking now is that we should have raised more the parking rates just after the crisis appeared,
although I feel they may take too much time to take effect in a state of emergency.
In any case we should have started to sell NSRs earlier.
We would never know.
But please take it easy. You are not the culprit here.
Shareholders are, including @JordanLee .

I agree.


#274

@masterOfDisaster chanted that line in many posts. No one acted on it.


#275

I’m late to the thread and it was quite a read. My first thought is that it wasn’t the actions of @masterOfDisaster that caused the broken peg. From memory, the larger spread operations were an experiment to explore the validity of the idea. They were to be a very last bastion of defence to prevent the peg going into free fall. They were intended to work alongside the other liquidity operations to provide multi-ranked liquidity in tier 1, akin to what is achieved through the parametric order book of NuBot.
The use of the larger spread gateways to defend the peg directly was set only because I allowed the funds of NuPool to run out and had to cease operations. That was not a unique situation either as the funds have run out a few times in the 9 operations of NuPool. I also recently found that I had not taken exchange fees into account when setting parameters for the NuPool operation.
I would count myself among the incompetent liquidity providers and it surprises me that I haven’t been mentioned in the thread so far. Please do consider me for the chop if this motion does pass as I would consider my (in)actions to be more detrimental to the peg than the defensive use of a wider spread by @masterOfDisaster.

On the subject of liquidity provision my concerns are technical. NuBot has been developed over quite some time and has operational features designed to remedy the issues in liquidity provision as they arose. These issues would affect any decentralised bot and aren’t unique to NuBot.

  • if we lower the minimum spread when multiple bots are used on a pair (as in ALP) we risk the bots consumming each other’s orders. Could be a double edged sword as reported volume would go up but LPs would likely need additional compensation to cover the addition fees incurred.
  • Use of the parametric order book means that there should be a tight spread most of the time. NuBots original design had all funds very close to the peg but was open to abuse from the dumping of large trades. Parametric order book means that the funds are still available on order but a large dump will incur a price penalty. Alternatively a dumper can wait for the peg to replenish in ~60 seconds. The price penalty translates to profit for the LP. This could be directly to Nu when Nu funds are used or to a private LP when operating under ALP. This potential profit from dumping is an important factor in making liquidity provisioning an attractive opportunity with a real chance to turn a profit. @Jordan Lee, in your opinion, is the use of a parametric order book still valid?

Regarding future developemnt:

  • there is an update to ALP which can adjust the reward for each side to make the less supported side more attractive to LPs. That will be released soon. For the next operation I would like to introduce more ranks. These will allow for the reward to be tapered away from the peg meaning that the incentive to have orders in a very small spread is higher.
  • there needs to be some sort of feedback in NuBot to take any unbalance in reward into account and target funds to take advantage (effectively automatic reblanacingbof of sides where possible)
  • there are requests for additional NuBot exchange wrappers which needs investigation.
  • I’d like to attempt the Fiat gateway website as I think onboarding and offboarding to Nu should be made easier.
  • that website could also host the ‘burn’ service which could help drive demand for NuBits. I will create a proposal when I have some ideas around the size of the tasks.

#276

Please review the facts before you blame. There are no actions I have done against any passed motion regarding liquidity.
Please let me know if you want to get rid of me for other reasons, than I will leave the forum or just stop this silly blame game.


#277

Some time line:

Nov 15 - Jan 16, '16: The high spread “last line od defence” concept was posted and experimented.

Jan, '16: During liquidity crisis @masterOfDisaster increased spread to 1.8% and 3%, saving the peg from catastrophic faileur single handedly. No one helped. No one said no.

March, '16: It was suggested to put into active gateways as a norm. A community member (@Cybnate) had reserves. A few supported. Most, including @JordanLee , had no comment.

May 15, '16: @JordanLee posted Lack of commitment to liquidity is our biggest threat now

May 21, 16: @JordanLee posted the 1% motion.

May 27, '16: BTC price jumped. T4 went dry. NuSafe was to be used. moD claimed increased spread. Courteous dicussion ensued.

Jun 4, '16: @JordanLee posted questioned T5, T6 partial utilization, no connection with large spread made.

Jun 6, `16: JL made Firing post

Did I miss anything important?

edit: maybe need park rate changes and sentiment against NSR sales.


(2nd Version - Expanded) My Interpretation of Jordan Lee's Liquidity Engine Model & Why its First Attempt at Pegging Failed
#278

no mention of any spread concrete figure?


#279

Just the reality of the moment maybe?

Jun 8 Looking at CMC and Poloniex orderbooks, I believe NBT is now officially free floating exceeding the 5% threshold (0.93) and having less than 4 BTC on Poloniex buy side. NSR selling for 0.0011US$. FLOT appears to be dissolved or dysfunctional. It is a bad day for NuBits holders and NSR holders.


FLOT BTC Operations (buy side)
#280

Yes - there is an official run on the bank and red in the streets.

So the question is - what do we do?


#281

We are working on injecting liquidity to gateways at FLOT BTC Operations (buy side) but getting 5 members to sign hasn’'t been successful.


#282

Sorry - I did see that. I know work is being done.