I have wondered for a while how to reduce NMR price volatility. Not so long ago price dropped and had some dramatic increases.
Although I think that NMR has some inherent value and its price should eventually go up w.r.t. ETH, it is still inside the crypto world which might be a bubble. I can not afford investing and seeing NMR drop to <10USD. Setting buy limit orders will not protect me from a continuous decrease. Dollar cost averaging is also not a solution.
This is a problem that was already discussed many times. This post recommends to short sell an amount of NMR equal to that staked, which seems reasonable. But I couldn’t find that option in coinbase pro as recommended.
The questions are:
how do you reduce NMR price volatility?
are you covered if the price goes down until 6 USD?
I’ve been thinking about it as well. The big problem with shorting is liquidations, because you wouldn’t be able to withdraw your nmr in time to profit from the stonk that liquidates your short position. Another option could be to borrow nmr, but there is a problem with fees (if you want to pay your debts regularly), and also you would have to collateralize a lot more money to not get liquidated, thus limiting your gains a lot.
I am currently thinking about buying back strategy. Basically, I pick a bottom, for example 6$. And stop loss ratio for example 0.8. Every time the price of nmr drops by 20% (100 - 0.8*100), I buy nmr to have the same value as at the beginning. The amount of money that it needs to be available for buy backs depends on several parameters: NMR’s initial price, NMR’s lowest price, loss ratio, and initial amount of nmr.
You can borrow NMR on sushi kashi (https://app.sushi.com/borrow). However, there is not enough NMR in the pool to make it a real solution. Interest rates are skyrocketing up and down if somebody is putting in money or taking out money.
I guess Numerai could make a million NMR available from their treasury to borrow on sushi kashi – if they decided that was a problem they wanted to solve.
