Topic: [BETA]Bitfinex.com first Bitcoin P2P lending platform for leverage trading - page 31. (Read 137528 times)

I'm a little baffled that no margin positions closed as well?  Any explanation?

I still have a lot of money being loaned out at really high rates, Bitcoin just dropped $80, so I expect every margin position to close now. How comes they are not closing? Are the traders positioned to expect this crash? I doubt it. Does lag account for our money still being used? Are positions being closed at the right time? We are sinking fast.

Is there any problem in executing them due to Gox lag?

Still bitfinex is a trading platform, the lending feature is there to help traders who like more risk and more return - not to borrow money for investing it elsewhere.

Bitfinex is a trading platform mainly, lending is just there because the operators don't have that deep pockets themselves.

Our margin trading feature is unique in the Bitcoin world. Basically, it allows you to borrow funds from lenders (see next feature) to trade bitcoins. If you make a profit, you get the profit and pay the depositor interests. If you make a loss, you reimburse the depositors the whole borrowed amount.
For example, let's say you want to open a long position for 100 bitcoins. That means you want to buy 100 bitcoins hoping to the price will go up. The system will borrow for you 100 * the bitcoin price US dollars (let's say 1300 USD) from lenders, at the best rates available. Your position will have a maximum period (defined by lenders), after which you will have to reimburse the 1300 USD (close the position). Each hour you will be charged an interests rate going to your(s) lender(s). If later you want to increase your position, you can borrow more funds, which will have there own maximum period.
At any time before the expiration date, you can close your position. This will reimburse your lender, and you will keep the profit.
The same goes for short position (selling bitcoins), where you borrow bitcoins instead of dollars.
If there is no lender available, you will not be able to open your position. Your order status will be "NO RESERVE ACTIVE", which means that it will be executed as soon as there is funds available.
The trading wallet is used for margin trading. It does not serves the purpose of buying or selling bitcoins, it serves only as margin requirements; that is, even if you have 1000 US dollars in this wallet, if you open a 10 BTC long position, you will borrow the needed USD. Funds in this wallet are to cover for eventual losses that may occurs. When the losses covers almost all your wallet balances, you may get a margin call and have your position force-closed to avoid further losses.

Yes, it's, in fact, I remember Raphael somehow considered this the greatest threat to Bitifnex's financial position.

They are trying to create a unified orderbook grabbing orders from all major exchanges so as to maximize their liquidity.

So if Bitcoin dropped to $100 a lot of margin positions would close and the lenders would get their money back.

However, has MtGox lag been taken into account? If the price drops the MtGox lag will delay Bitfinex closing those positions and then suddenly all the lenders lose our their money, and not because of a "black swan" event, but rather a 50% drop that may happen any day now. I fully expect Bitcoin to recover from such a event but all the lender USD will be destroyed because of MtGox lag.

Is this a valid concern?