[Withdrawn] Make Firing and Replacing Incompetent Liquidity Providers Our Top Priority

[Nagalim]

So there are 20 BTC bid on polo NSR/BTC. That’s barely over $10k. When the share price crashes to the ground, you don’t think that will cause someone to sell a measly 10k NBT? Then what do we do, when there are no more orders on the books?

[backpacker]

but share price of Nu was low before we ran out of buy walls and there were not many buy orders for nsr to fill the demand for btc, have you seen the situation unfold as I have? you’ve declined to run an auction as well. how could flot get btc to support the peg? what would you have done, but let’s stay in character and accurate with the facts as they stood in the end of may.

[masterOfDisaster]

It is my contention that this was a completely unauthorised action taken by a few individuals and it doesn’t reflect the will or interests of shareholders.

I suppose you start a NuBot, request funds from FLOT and show us how liquidity provision at 1% spread looks like at the moment!
Do you already know how to blame me for you running out of BTC?
Is it me unsettling the market that will cause that?

those few individuals who acted otherwise were not authorised to do so and do not enjoy the support of shareholders

Can you please limit it to me and not make more sacrifices than necessary?
It’s my contention that Nu is in this desperate situation, because hundreds of BTC were sold for NSR.
It’s a good attempt to make me the sacrifice for your erroneous assumption that NSR are good to store the proceeds from NBT sales.
You will get away with it. You are more elaborate than I am.
And you manage to make a point without having data.
You make the claims appear as truth, which they aren’t.

where is your authorisation to abandon the peg?

Oh, I didn’t abandon the peg.
I supported it as good as possible with the limited funds that were left.
This was based solely on my discretion as FLOT member, being elected to support the peg.

This is the point: what you have done destroys demand for NuBits, it destroys tier 5 and dramatically reduces the utility of tier 6.

What you have done made Nu get rid of hundreds of BTC (which would be quite valuable, if we still had at least parts of them, btw.).
Now you are trying to put the blame on me?

Make a NuBot, request funds. Run NuBot at a tight spread (you will use an amount per order that can be tracked) and show us how you manage liquidity provision at 1% spread without running out of BTC.
Get it: if you have no BTC left, there’s no peg left!

Stop accusing me.
Start acting. Run that damn NuBot. Wanna have some help configuring it? I’d do that, really!
Or finally put that damn motion up for voting.
I’m fed up with your mud slinging, trying to me look like I’m the reason for the situation, while in fact a way too low reserve is the reason not to be able to withstand that surge of BTC rate.

[Nagalim]

I get the feeling JL has never been a market maker himself, in person.

[JordanLee]

So there are 20 BTC bid on polo NSR/BTC. That’s barely over $10k. When the share price crashes to the ground, you don’t think that will cause someone to sell a measly 10k NBT? Then what do we do, when there are no more orders on the books?

If there are no orders on the books, and a period of time passes without any new orders being put up, then that means every single market participant has determined that NuShares are worthless. The only reason NuShares would become worthless is if all market participants agreed there was very little chance of greater NuBit demand in the future. The NuShare price action is telling us that there is less confidence in NuBits sales in the future with each passing day. This is because the peg has been abandoned.

[Nagalim]

If there are no orders on the books, and a period of time passes without any new orders being put up, then that means every single market participant has determined that NuShares are worthless

This is clearly wrong. Anyone with knowledge of market making knows that putting orders on the books draws counter orders.

[JordanLee]

what would you have done, but let’s stay in character and accurate with the facts as they stood in the end of may.

keep a 1% spread, raise park rates as quickly as possible and use NSR sales as much as needed to keep buy walls up.

[JordanLee]

Anyone with knowledge of market making knows that putting orders on the books draws counter orders.

Of course that is true. No doubt reintroducing a tight spread will result in fewer USNBT in circulation in the immediate term. It is the long term we need to focus on.

[masterOfDisaster]

The NuShare price action is telling us that there is less confidence in NuBits sales in the future with each passing day.

The NSR rate dropped when it became apparent, that NSR need to be sold to support the peg. People with that knowledge frontran the rest of the market.

The NSR rate is hovering around 300 Satishis until then.

##last 7 days

##last month, drop at 27th May

##NBT peg tight until 28th of May

Why don’t you stick to facts? Is it really easier to eloquently present claims as truth?

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Addendum - for the record, because the peg still looks quite good the last 7 days:

[backpacker]

This is how I remember it too.

[jooize]

We have ~38,505 USD in Bitcoins.

[jooize]

Did we have regular amounts of liquidity May 28?

[MatthewLM]

And I don’t understand why the bitcoin is not sufficient in this situation. And I don’t understand why the reported tier 1 liquidity is about 12k NBT and yet nothing but peanuts is on Poloniex.

[jooize]

I’m beginning to agree with both that and Nu needing to push liquidity in any case.

[Sentinelrv]

Please let’s stop with the blaming about things that happened in the past, because it’s unproductive.

• @JordanLee suggested the NuShare buybacks in the first place, which led to our current low BTC reserve.

• @masterOfDisaster responded by doing what he could with the experience he’s gained to try to preserve our remaining BTC so the reserve and peg was not lost completely. His solution of a $0.95 buy side while preserving our Bitcoin reserve has had the drawback of lowering NuBits demand and preventing park rates from being used effectively.

Both of these things happened. That’s a fact, but please let’s focus on what we can do now to remedy the situation.

We can’t put all of the Bitcoin we hold right now into a tight spread, because it could be gone quite quickly leaving us with no defense at all. Will we be able to hold a NuShares auction first to acquire more Bitcoin before recommitting to a tight spread? If we switch to a tight spread right now, we will most likely run out of all Bitcoin before any auction is complete.

Once we have held the auction and have more Bitcoin reserves, we can recommit to a tight spread and hopefully park rates will start to become effective again after, which could give us enough time until Bitcoin reverses direction.

[MatthewLM]

But there is very little liquidity on poloniex even at $0.95 There’s 750 NBT at around $0.95, and 1250 NBT at about $0.94 but nothing else. Where is this other 10k NBT liquidity at?

[jooize]

We can’t put all of the Bitcoin we hold right now into a tight spread, because it could be gone quite quickly leaving us with no defense at all.

I’m on the fence with this. Putting all (or much) of that into liquidity should instil more confidence than just a little liquidity, with the potential result of fewer NuBit exit trades?

[MatthewLM]

I think you are right about that. I’m considering calling it quits. This doesn’t make Nu look good. Especially annoying is the difficulty in understanding what on earth is going on.

[jooize]

Assuming we shouldn’t just actually put everything straight onto the books, as suggested is mandated. I’m going to have to sleep on this at least, and I need to attend a thing tomorrow, with unfortunate timing.

We have 7000 USD worth of Bitcoin on @zoro’s gateway that’s being voted on by FLOT to reduce to 1% buy-side offset (or 1% spread if agreed).

FLOT BTC should consider sending to NuLagoon Tube and gateways at tight spread.

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This doesn’t make Nu look good.

We’re still an impressive community.

Especially annoying is the difficulty in understanding what on earth is going on.

We lack deep liquidity on buy side (when people want to sell their NuBits for Bitcoins) and FLOT is afraid to use the remaining funds. We argue about whether FLOT has broken NuLaw, whether it’s been the right thing to do, and what to do now. Does this answer it?

[henry]

We tend to agree what Jordan implies in his motion. At this difficult moment, we, as NuShareHolders, should show our determination in defending the value of Nubit. That is the only way to let people regain confidence in NuBits.

If we put money on buy side and see them to be consumed quickly doesn’t mean it is wrong to put money on buy side in the first place. We should bear in mind that people could sell NuBits for Bitcoin for two reasons, 1. Bet that Bitcoin price will rise. 2. Fear that NuBits wouldn’t liquid out. The custormers leave for the first reason will back in some point of future, however, those leave for the latter reason won’t back again.