That would be way worse for Nu, because of the missing collateral.
If I offer collateral, it will lead close to where @Nagalim’s proposal already was, but without solving the problem of heavy FLOT utilization.
It would still be of inferior quality as T3 instrument.
But this (gateway) has already shown that it is working and NU shareholders are happy with it. (i guess)
Then why not transform it a little.
@Nagalim,
this is also valid for you.
What if we can somehow make T1+T2+T3 working as one?
It is like building up from a working solution, this is what shareholders want to see (i think)
NSR holders are happy, because nothing went pear-shaped so far.
I highly recommend to visit [Withdrawn] T3 Trusted Custodianship @Nagalim
again.
This is critical. A T3 custodian uses less funds over a longer period of time whereas gateways use large amounts of funds over a short time. Therefore, T3 is easily collateralized and gateways aren’t. You can collateralized 10k with a gateway or 2k with a custodian and get similar results. The reason for this is because the gateway realizes that it is in possession of risk and is trying to get rid of it while the T3 custodian is in a steady state.
Bingo. No shareholder funds on-exchange. Shift the risk from Nu to the LPs. This is why we developed the Tier system, and has been our bread and butter since the exchange hacks. Did you not realize this is what we were doing when we created ALPs?
Also, why does the NBT have to get to T1+2 at all? Why can’t the customer just deal directly with the T3 trusted custodian? Thereby, Nu gets 0.1%, the custodian gets 0.2%, the customer gets a happy price and external third party exchanges get 0%. Clearly, if there is demand on exchanges, that customer can turn around and sell at a profit if they want. The point of T3 is to balance the sides using T4, not to force liquidity on exchange.
I thought your argument was that we already had everything we need for gateways to work? Who is doing this triggering script and who owns that wallet? Dare I say, a T3 trusted custodian? What’s their motivation for behaving properly?
How do you distinguish between an order put up by the custodian and an order put up by someone else? You don’t. The custodian will just claim that all those other orders on the books are theirs. Remember, you want to activate the gateways during normal times, not necessarily during peg break events. During normal times, we would have no way of knowing if the gateway is behaving properly because we don’t have exchange records.
Let me know when you actually figure out how to do this magical procedure that is not complicated and has no overhead or costs.
Ok, so you’re saying we pay the gateway operator based on volume. To do that reliably, we’d have to pay them based on how many NBT we deposit and how many get withdrawn. I.e. we’d pay the same thing as for the T3 custodian, therefore the overhead for T3 custodian and gateways will be the same. Also, just so we’re keeping track, this is another thing about the ‘everything works’ gateway process we are changing to make it actually work.
Lol at market manipulation being a small risk.
The difference is that you don’t have to withdraw from exchange to use this service like the gateway does. The trade happens off-exchange, meaning no withdrawal fees.
Literally the only acceptable argument I’ve gotten is that this procedure is ‘too complicated’. Weak.
A month later and nothing to show for it.
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A maybe relevant piece of information (the reasoning can be found in the post from which the quote is):
Why can’t we try something else.
What if an active LP wants to act like a T1+T2+T3 custodian and make weekly or twice a week transactions with FLOT?
The LP will first sent the BTC or NBT required to FLOT addresses and then he/she will wait for FLOT to sign the transaction.
He/She needs to be trusted in what way? I mean a motion will be necessary then?
What is the incentive mechanism? Are we paying them as T1? So is this just an MLP operation like NuLagoon? A NuLagoon competitor would be fantastic.
This proposal can exist alongside MLPs.
If he/she gets funds from FLOT at exactly 1$ and then uses the ALP servers with a spread 0.5-1% isn’t enough?
So you’re buying from FLOT directly and putting it in ALP? Isn’t that just what you’ve been doing already?
And that’s exactly what’s unsustainable (FLOT members will sooner or later burn out always being required of tracking the liquidity situation, answeringto requests and being ready to sign) and unreliable (FLOT multisig slow compared to singlesig T3 custodian).
Maybe the way to T3 custodians is easier without gateways (sadly only available for Poloniex, but required for all exchanges) always in standby.
The gateways are a kind of shortcut around LPs buying from FLOT.
To rely on this shortcut is dangerous for the health of liquidity provision for several reasons, the most important being the risk for Nu funds.
Not yet. It seems that FLOT prefers the gateways than me 
No offense intended, but dealing with you would be just as bad as using the gateways (in terms of sustainability) 
The benefit for Nu (not for FLOT members!) when dealing with you (instead of using the gateways) would be the eliminated/reduced risks (most risks are in fact eliminated).
Have you considered using NuLagoon Tube instead of trying to arrange a deal with FLOT?
Or even thought about becoming a T3 custodian yourself?
We can change gateways into passive liquidity sources, it’s true. The only difference then is literally the Tier: either we are keeping our reserves on exchange and using NuBot, or we are keeping them in single-sig wallets using manual trades. I hope shareholders learned not to keep Nu-owned funds on-exchange.
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With whom the funds held by nagalim would be traded?
Whoever I can make a deal with. I’m paid by comission.
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Yes, but you know NUlagoon is like trying to rebalancing using other exchanges. It cannot print NBT or use BTC “reserves”. It has to make deals with FLOT, too!
Thus, it acts like a middleman in this case.
I was thinking of continue my operation as a T1+T2(+T3) LP. Even if i become a T3 custodian i want to operate like a
freelancer not be in NU’s payroll, if you know what i mean
Middlemen are required. T3 custodians would be middlemen, too.
The thing is that with middlemen the FLOT can do its job more planned and less in reaction to immediate market needs.
The middlemen would act as a buffer.
Middlemen in all businesses are always the reason for higher product cost!
How can we eliminate middlemen and keep the cost down?
If a T1 custodian gets NBT for 1,003 then it has to sell it higher than that.
But if he/she gets it at 1$ then the spread will be lower.
The real problem here is how we can put printed NBTs in the markets with the lower cost.
Middlemen get the product where it needs to be faster and take a small cut. Clearly, we are having problems selling wholesale to every vendor and employing a few middlemen is a step forward not back. Complex financial systems have middlemen for a reason, they aren’t useless.
Besides, gateways have 2 middlemen: the exchange and the gateway operator. Basically, someone will take the role of middlemen, so why not create the position explicitly so we can control the rules?