Topic: Ahead to Nu worlds! (liquidity provision for fun and profit, 9% monthly return) - page 2. (Read 3247 times)

Good morning everyone.

The 30 days of the advertised NuPool operation is coming to an end. The pool has been consistently providing between 30 and 40 thousand NuBits of liquidity so thank you for your support.
While that is great it is a fair bit short of the targetted liquidity of 70,000 NBT. This means that there is a decent amount of funds left over to compensate pool participants in the next 30 day operation, which we intend to start almost straight away.

Voting for the next grant has started on the NuBits forum. The pool operational parameters will remain largely the same apart from the target liquidity which will be reduced to 50,000 NBT.

This means that there will be another 30 days in which to earn an up to 9% return on your funds. To participate, follow the instructions in the OP.

There will be a short outage of service later today (16th June 2015 UTC) while the pool server is stopped, updated and restarted. No action is required on your part, the client should reconnect once the server is receiving connections.

Here the receiver of another grant and operator of the LiquidBits pool https://discuss.nubits.com/t/passed-liquidbits-net-trustless-liquidity-provision-on-usd-eur-and-btc-pairs/2062,
which runs on the same software but a different instance as the OP, Nu-Pool. The LiquidBits pool operates just on different exchanges with different pairs.

Just check out our interest offerings on the CCEDK USD/NBT and EUR/NBT pairs and Bitcoin.co.id BTC/NBT pair for providing liquidity. For June and July CCEDK offers no deposit fee on USD and EUR. Please check out further details regarding CCEDK offering here: https://discuss.nubits.com/t/ccedk-signs-bank-agreement-zero-deposit-fees-on-usd-eur-and-cny-next-two-months/2217/1

Also good to know that there is no joining fee for the pool, you only need an account on either CCEDK.com or Bitcoin.co.id, add a few coins to your account and run the client software on a daily bases.
Instructions on how to get started, FAQs and more details here: http://cybnate.github.io/index-liquidbits.html

Just take notice that it is still work in progress as most things in the cryptoworld and it comes with all the risk related with having your coins on exchanges and in case of the NBT/BTC pair including hedging risks.

So please do your due diligence and don't risk more than you can afford to loose!


http://cybnate.github.io/index-liquidbits.html

I have personally tested all three pools: Liquidbits, Nupond and Nupool.
My experience is that the bots run stable and there's easy money to be made - if you can stomach the risks!

While participating in these pool operations might not be a good idea, if you need to lend money (or spend money you can't afford to lose) to buy BTC or NBT, because you are expecting a safe 9% monthly revenue (you should reconsider you ability to do business in that case...), it might be an attractive idea for those who already have BTC ot NBT.

Although the warning is already here, it can't be repeated too often:
participating in those pools poses risks.
The compensation of up to 9% is expected to exceed the losses caused by that risk.
This is why the compensation is expected to drop.

I've been running bots on those for some time and in the end I've made more money than I've lost from volatility etc.
If you want to avoid volatility risks, you can choose a pool that has liquidity operations in NBT/USD.
So you have zero volatility risk. Only risks like exchange default or theft remain.

It should be mentioned now that things aren't expected to stay the same. The aim of the Trustless Liquidity Pools is to lower the cost of providing liquditiy to the Nu network. This is to be done by increasing the level of competition between pools. There is currently a rough feeling  that the cost to Nu of providing liquidity should be ~10% of the amount of liquidity brought to market. As NuPool is the main active pool currently we are able to offer the current rate of 9% for this month. Every 30 days we, as pool operators, need to re-apply to Nu for a grant to fund the compensation for the next 30 days. As more pools come online and the competition increases, the share of this 10% that each pool can command will be reduced.

Pools such as LiquidBits and NuPond have been testing for a while and are now coming online. As the targets of liquidity aimed for by these pools increreases so will the competition between pools. It would be beneficial for pool users to keep an eye on which pools are offering the best rates of return, on which exchanges and pairs and which have gaps in the liquidity targets (allowing for maximum raturns to be gained). Efforts are underway to display this information for ease of digest. The raw data can be seen here https://raw.nupool.net/?pairs=true&json=true. It will eventually be used to display data on the nubits.com site.

I don't know what compensation levels will be on offer from NuPool in the coming months, only that it is likely to change from now.    

You are absolutely correct, my Maths is out by a factor of ten. I'll blame 'trying to do too many things at once' but colour me embarrased none the less.
For an investment of 1 BTC, you would receive 0.705 Nubits in 24 hours not 7.05 as previously stated.
Apologies for my misleading statement before, it really wasn't intentional.

Good morning everyone. Apologies for the delay in replying.

The Bitfinex ticker is used to calculate the price of $1 in Bitcoin, in order to set the buy and sell walls. This message would indicate some sort of communication issue between your client and Bitfinex.   
If it only apears every once in a while, I wouldn't worry too much.   
If it appears lots and lots, I would restart the client. If that doesn't fix it, it may be worth checking to see if you can reach Bitfinex through a normal web browser in a decent amount of time. 
Either way, it shouldn't affect your clients performance as if the connection to Bitfinex fails, the client will roll back to Coinbase and then Bitstamp for the price feed. 

 This means that some of your order validations aren't making it to the server. In response your client is upping the number of requests it sends each minute to compensate.   
As with the error above, this could be caused by a number of reasons. Slow network between your client and the server could mean that samples don't make it in time (each sampling round lasts 60 seconds).   
A slow response from the Poloniex API could cause the same. 
As with the above, it shouldn't be a large cause for concern unless you see it repeated lots over a prolonged period. If that is the case, restart the client and see if the issue persists. 

The daily return rate currently set on the pool is 0.3%. Thus, your return for providiong 1 BTC of liquidity for 24 hours would be 0.03 BTC = 7.05 NBT

locohammerhead earned 0.1 NBT for an hours liquidity provision so in a day he would earn 0.24 NBT.
0.24 NBT is 0.3% of 8 NBT or 0.0340 BTC

I keep seeing


what does this mean?

been running this for an hr so far and I have earned .01 NBT.  Certainly an interesting concept.

I am getting a message stating "Warning unable to update bitcoin price from bitfinex"

I totally agree and can confirm that based on my own experience!
There's no need to invest in specialized hardware that can only be used for one thing (e.g. like SHA256 or Scrypt PoW miners).
You should take into consideration that the device which is running the bot consumes electricity, though.
My bot runs on a RaspberryPi that needs only 2 Watts.
The reward is shown on a per month basis. But effectively you get paid each minute you verify to the server that you have placed an order of amount x. Here's one example of my bot



The value after "ppm: " shows you how much you earn per minute (payout per minute).
The funds are in my account at bittrex and under my control all the time. I allow the bot to place and cancel orders. That's all.
But apart from that I can do with the funds whatever and whenever I want!
...at the moment I provide liquidity with it and at the end of the month I will have made up to 18 NBT (=USD) with the 200 NBT I put to this use.
As soon as I don't want to continue providing liquidity, I stop the bot.

Regarding risks: as you see the 200 NBT are no longer 200 NBT, but 198.4340 NBT.
This is due to NBT having been used for hedging BTC. At the end of the month the net gain won't be (up to) 9%, but less.
I assume it will be profitable anyway. If it isn't I stop and wait for better offers in terms of pool rewards.

All you need is some money you can use to join the pool and some minutes to create an account at the exchange, download the bot and configure it.
You can already start the preparation by downloading a NuBits wallet (which look awesome) and syncing the block chain (which is comparably fast), because you need - like explained in the initial post an NBT address to receive pool payouts.

Currently the buy and sell walls are fairly dumb. They are based on a price feed and shifted to $1+exchange fee on the sell side and $1-exchange fee on the buy. All the funds from the pool are put into these large walls so no thought is given to market shaping. 
The target is to have the walls completely equal on each side. The balance of the walls will of course depend on the liquidity that is provided by the pool users.
As you mentioned, NuBits are a good hedge in a bear market so we tend to find that in a downtrend of Bitcoin price, the majority of the available liquidity ends up in the buy wall and vice versa in a bull market. This is what was referred to a the 'hedging risk' in my list of risks. As a user, it would be beneficial to you to monitor the balance of liquidity in the pool and supply funds to which ever wall isn't at target as this will ensure that you get the maximum available compensation.

There are plans to integrate the pool software with the official NuBits trading bot called NuBot. An anticipated update to NuBot will allow for more intellegent walls top be placed, which shift depth and change shape depending on market pressures.

I believe liquidity pools like these have the potential of becoming even bigger than proof-of-work mining pools. The reason is because no expensive hardware is needed in order for people to join the pool. All you need is some available funds that you can use to provide liquidity with. Most people have access to at least some money they can use, so a large barrier to entry in pool participation has been dropped with this technology.

Also, I realize the task of reading the entire Nu forum can be daunting, since there is so much content and history. It's hard to catch up and understand the current state of Nu though without doing this. So I took it up myself to create a thread dedicated to the history of Nu, which includes all the major events in order, descriptions, direct quotes and links to source threads. My hope was that this history would allow anyone new to NuBits to quickly and easily catch up and get involved. This is only a first draft, but I felt it was complete enough to share with you all in case you were interested in learning how Nu has evolved over the past 7 months. It will help bring you up to speed so you can get involved immediately. Here it is...

History of the Nu Network: https://discuss.nubits.com/t/history-of-the-nu-network-feedback-please/2088

Edit: Also here is our animated video describing the system...

https://www.youtube.com/watch?v=D_imtRPCKCg

Thank you.

I wasn't expecting such swift or positive feedback. I hope the idea is as well received by others.

This is really interesting-- payment for provision of liquidity as a reward for risk reminds me of the early days of direct-access electronic trading of Nasdaq stocks for ECN credits. It makes sense that the first place for this to happen would be on a stable instrument like NuBits.

I'll definitely support this and join the pool. Thank you!

Hello.  
  
My name is Sam, I post as woolly_sammoth on the NuBits forum. I'd like to make you aware of the possibility to make some profit from Liquidity Provision in the Nu network.  
This opportunity exists through liquidity pools that pay compensation for funds provided by you. The pools operate in a totally trust-less manner meaning that you stay in total control of your funds 100% of the time and can dip in and out as you see fit.

To explain how this works it's probably useful to give some insight into Nu and what we are trying to achieve there.  
Nu is a DAO (Decentralized Autonomous Organisation) whose aim is to provide a stable crypto currency in the form of NuBits. NuBits are pegged to the US Dollar such that 1 NBT = $1.  
Nu and NuBits were launched in September 2014 as a vision of Jordan Lee and the Nu team (most recently active with the proposal to develop the Blocks and Chains Decentralized Exchange). Since that time, NuBits have done a remarkable job at keeping their stable value.  
There are several mechanisms by which the stable value is secured but perhaps the most important is the provision of liquidity to the market through the crypto exchanges that support NuBits. The provided liquidity is used to set up large buy and sell walls that ensure that NuBits are always bought and sold at $1 (in reality there is a small spread (~0.2%) to take exchange fees into account).  
The provision of liquidity is handled by 'Custodians' who are elected by Nu to erect the buy and sell walls. Until recently, becoming a Custodian was fairly hard. It requires the trust of the Nu community to become elected and access to a fairly large amount of funds to provide as liquidity. Custodians are rewarded for all this through grants of NuBits.  
  
Recent software developments mean that it is now much easier for anyone to become a Liquidity Providing Custodian (LPC) without having to become elected and with any amount of funds they see fit. This is possible through liquidity pools.  
These pools allow anyone to share in the compensation available for providing liquidity for Nu by simply running an open source application on their computer and allowing it to place orders on Nu supporting exchanges on their behalf. The software uses the exchange trade API to place orders and then sends a cryptographically signed confirmation of the order to a central server which validates the order on the exchange and rewards the user accordingly.  
The beauty of this design is that the user remains in complete control of their funds at all times. It is available on their exchange account for trade or withdrawal whenever they choose. The central server has absolutely no access to the user funds in any way whatsoever.  
  
To add to the gamification of the process, users who provide liquidity are in competition with each other. The pool server sets a target of the liquidity it aims to provide on each exchange and a maximum daily rate of return. Users connecting to the server are able to specify a minimum rate of return that they are willing to accept for their liquidity provision. If the target isn't filled, everyone is rewarded at the maximum rate as specified by the server. Once the target is reached however, those users who have specified a lower acceptable rate will be rewarded with the servers maximum rate first. Those users who have a higher acceptable rate set will be rewarded by the server at a lower rate or not at all depending on the number of active users and the amount of liquidity that is being provided over the target.  
More information on the maths involved in this process are available in the discussion thread here.

There is currently one liquidity pool in full operation. It is run by me and Willy on nupool.net. There are other pools being lined up but for those who want to get involved now, NuPool is the pool to choose.


NuPool is currently operating on Bittrex and Poloniex with a liquidity target of 35,000 NBT on each exchange, split equally between buy and sell walls on the NBT/BTC pair.  
The compensation available through NuPool is 0.3% per day, a total return of 9% for the 30 days of the operation.  
  
If you want to get involved and start benefiting, you will need to download the pool software from github (available as a zip release here).  
The setup is straightforward and is detailed on the NuPool site under the 'Getting Started' menu on the left. The basic procedure is to create API keys for the exchange(s) you choose to provide liquidity to and fund your exchange account with NuBits and/or Bitcoin. Provide the details required in the pool.conf file, set your minimum acceptable rates and start the client. The orders will be placed on the exchange and your account will start accruing credits.  
The server pays out every 24 hours as long as you have at least 1 NBT balance. All payouts are in NBT so an NBT wallet is a must.  
The pool software itself doesn't need any specialised hardware and will run quite happily on a Raspberry Pi or similar small board computer.  
  
To make things easier and to help keep an eye on your pool account, I have created a desktop application called Plunge. This interacts with the central server to display your pool statistics. You can even configure and run the pool client from Plunge to avoid having to use config files and the command line.  
Plunge is available on github and comes provided with a Windows installer but will also run from the code on Linux or Mac (Plunge requires the latest version of Kivy).  
There is also an Android version of Plunge that just allows for monitoring of pool statistics, available here.  
More information on installing, running and configuring Plunge can be found on the forum thread
  
  
It needs to be mentioned that although the pool software is trust-less and the user remains in total control of their funds at all times, there are risks involved in liquidity provision.  

* All the software is considered Beta and is under active development. We have already had a successful run of liquidity provision using this software, where it was providing ~20,000 NBT of liquidity to market, with no issues. The Beta flag needs to be mentioned and considered by anyone thinking about joining a pool.
* Although funds are under the control of the user, they are held on an exchange. This introduces the risk of an Exchange default which cannot be mitigated by the pool software.
* Operating on the NBT/BTC pairs means that users are subject to a hedging risk as traders move their funds into and out of NuBits to avoid volatile Bitcoin prices.
* PLEASE BE AWARE THAT AUTOMATED TRADING WITH THIS SOFTWARE MAY BE RISKY, ADDICTIVE, UNETHICAL OR ILLEGAL. ITS MISUSE MAY ALSO CAUSE FINANCIAL LOSS. NONE OF THE AUTHORS, CONTRIBUTORS, ADMINISTRATORS, OR ANYONE ELSE CONNECTED WITH NUBITS, IN ANY WAY WHATSOEVER, CAN BE RESPONSIBLE FOR THE USE YOU MAKE OF THIS SOFTWARE

These risks are fairly small but need to be mentioned. The return rate offered by NuPool is enough to cover these and more.  
  
I hope that this post has interested you enough to find out more about the possibilities offered by NuPool and the other Trust-less Liquidity Pool soon to be available through Nu.  
  
See you all in the pool (the water's lovely!)