Post
Topic
Board Marketplace (Altcoins)
Re: Ahead to Nu worlds! (liquidity provision for fun and profit)
by
inuit_wallet
on 20/05/2015, 07:33:01 UTC
this is really intriguing. Are the buy and sell walls in both directions? Are they evenly allocated in each direction? How is this allocation determined?

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.