Topic: MPOE Bonds. The largest loaning operation in BTC. - page 2. (Read 2367 times)

Oh, ok.  Thanks!

You recall, it covers the MPOE options bot.

Trading options with a bot?

is this transsexual another Pirateat40 or Nefario?

Debate....

What are you using this money for?

I. How it works, user side. In order to buy a bond you need to:
a) email stating how much you're sending, what interest you seek and to what address interest and capital should be paid;
b) send your capital to 1JPvucRfu3ZzEvfBUQTJwsxMrZjeTqD6zR making sure the 6th, 7th and 8th digit are 8. Example: 100.00000888 BTC.

That's it. Your bond counts starting with the next month, you will be receiving monthly interest payments. On request you will receive your capital as well, but only on a month's end (4th weekend in any month).

II. How it works, MPEx side. Every month's end (4th Friday of each month) the capital needs for that month are calculated. For January 2013 this came to 60,807.41 BTC. Then, all the bonds are sorted in ascending order by their demanded interest rate, up to the fulfillment of the capital needed. All accepted bonds receive the same interest, equal to the highest asked.

For instance, in January this came up to:


In this case all bonds were accepted and MP added more capital, because the total capital needed exceeded the bonds deposited. The interest paid was 9.99%, equal to the highest interest asked (by the guy with the 1,904.91150845 BTC).

In December, on the other hand, needed capital was only 7,292.03 BTC. As a result fewer bonds were accepted:


Thus the interest paid was lower (4.99%). That latest guy only had part of his total deposit accepted, because only part was needed.

In the cases where the MPOE bot makes a loss, however, that loss will be applied to bonds capital, like for instance what happened in November:


While the interest paid was 9.9%, so a guy with 1,832.00000888 deposited received 181.36800087 in cash, the loss meant his bond capital retained for next month lowered from 1,832.00000888 to 1,744.89894245 (a 87.1010664 BTC loss on capital partially offsetting the 181.36800087 gain realized on interest).

III. In January bonds were paid a total of 6,074.660259 BTC. That's certainly the largest chunk of change paid out as interest by anyone in January, and I'd venture the guess that if you added up all the interest paid by anyone and everyone, plus all the revenue from PMBs and other such quasi-lending operations, you still won't come close to 6k BTC. If anyone can prove otherwise I'd certainly very much like to see it.

A large chunk of that 6k went to MP, because there weren't enough bonds on hand to cover the sudden surge in options trading that happened on the 24th. This literally means that if you were keeping your BTC somewhere else than in MPOE bonds you missed out, and if you made less than 10% you indeed realized a loss.

Obviously it is not always the case that MPOE bonds pay that much or that well. Here's a survey of their performance over the ~year they have been available to the public.

There are no fees whatever associated with this, but there is a 100 BTC minimum required to participate directly. You may however bypass this by buying some indirect managed instrument, such as for instance are available on Bitfunder.

If you have questions I'll be glad to answer, paste them below.