Also demand for Nubits explodes when BTC is falling, which is expected so I don't think their volume is fake.
In this way they'll likely loss money..
When BTC is falling, people want to sell BTC for NB, so Nu's bots will have to buy (BTC) high.
When BTC is raising, people want to sell NB for BTC, so Nu's bots will have to sell (BTC) low.
I guess there is something missing?
Yes. It's possible they raise the premium at these times but I think they still lose money during these extremes.
I think they subsidize the liquidity providers.
I think it works because they are constantly selling NBT and receiving BTC but not all the NBT they sell are coming back.
People might lose/forget or keep their NBT for a long time.
I think they are operating on a extreme fractional reserve and if a lot of people all wanted to sell their NBT at the same time they would have a problem because they've used the proceeds of previous sales to pay dividends, fund development, marketing and pay liquidity providers. (Their argument is that they have some liquidity tiers, they can use parking and finally dilute NuShares holders if necessary but NuShares is so illiquid, I don't think this is realistic.)
However they've survived so far without even needing to use parking rates I think, so maybe they can keep it going for quite a while.