Topic: [OFFICIAL]Bitfinex.com first Bitcoin P2P lending platform for leverage trading - page 102. (Read 723903 times)

Great!

When there's a procedure in place for requesting access - let us know.

And thanks once again

(let me quickly point out my reply above was actually to Sukrim's FRR / MarginBot post, not just an attempt to add to the FRR sucks discussion.  My opinion is out there, I'm done talking about FRR)

but, to quickly answer your other question, yes the default minimum is currently .065% on MarginBot, though I feel like most people have changed it.  Either way, there wouldn't be a wall in quite the same way there is with FRR at that point if everyone used MarginBot, for 2 reasons. 

1. Its a settable option. Some (probably large percent) would choose something different (put the option in front of people, and even the laziest will at least think about it, don't give them any options and they'll just say good enough, and I'm happy to point you to detailed research google did to show exactly this point)
2. Spread lending.  The way the bot works, it doesn't dump all the money into one bin.  It spreads the balance across multiple points and rates.  The current implementation of this in MarginBot would probably have to improve some if the FRR suddenly disappeared, but it works well with the realities in place as they are, and would be easy to change should those realities change.

I will also point out MarginBot is not a replacement for the FRR as it stands, it was designed pretty much with one thing in mind, to compete with FRR.  If FRR were to go away, MarginBot would likely behave very strangely and unpredictably.  But if that were ever to become the new reality, I can easily design the bot to deal with those new realities, as I'm currently doing with an eye towards other markets that don't have an FRR system (or, sadly, any volume to speak of).

I had been extremely disappointed with FRR throughout - for those who wants to say market knows best; I have only this story to offer - when LTC lending was first added, the FRR was 0% and people are stilling will to lend, at 0% - completely irrational!!!!!

I picked up on that issue and actually emailed Ralphy to say this is absolutely wrong and some kind of floor should be setup if there are no actual reference possible due to lack of fixed rate loan.  He instituted the 2% rate annually, which works out to 0.0055%, and look at LTC's FRR rate - it has been hovering around that mark with a couple of extremely short spike ever since - talking about efficient market / market knows best / no artificial wall here!

For those who say it's the 'dummies' problem to be willing to lend at 0% - yeah, obviously, they 'suffer' but they drag everyone down with it!  The plain refusal to recognize the FRR is an artificial wall that hurts almost everyone - yeah, BFX included, left me speechless.

Anyway, it is what is.

I don't mind, I totally understand your points, and believe me this is not the first or only instance where people as a whole seem to make decisions that make no sense to me. I mean...Keeping up with the Kardashians exists. So, while I definitely understand, I do know that a lot of people in general are looking for any returns.

I think that with so many people getting burned on margin trading, at least SOME of those people would much rather get some positive returns, while taking much less risk. So, in general, as the demand for long positions fades (until the next bull run) and the supply of available USD for swaps increases, in general, rates probably would go down. If anything, I am looking into the BTC swap market right now.

I set up HowardF's bot, and I really like it (not a huge fan of php, but it works really well). I am wondering if we offer that option to more people, and make them aware of it, if they would voluntarily switch from using the FRR to using a bot instead...

I honestly think it would make for a better market, BUT, I don't think most people will be happy with the result. I know of a lot of people who are very interested in the swap market, and all that supply just means that rates stay low. So, I was able to set up the MarginBot very easily using elastic beanstalk (the cron job part is a little tricky, but still possible). I was thinking that if Bitfinex were to announce or in some way support MarginBot, maybe more users would choose to go that route. It still allows them to "set it and forget it", but at least then they can put in a minimum (i personally think that that number will be set to 0 for most people, but others disagree).

I am perfectly fine with being a lightning rod, and I know that markets are not efficient, and that they can remain irrational a lot longer than one can remain solvent. Hopefully, if we at least make people aware of a tool, they might choose to use it.

On the one hand... yeah, fair enough, you have a point there. On the other, I can't express my frustration with these people in a form that they're ever going to see, so my next best outlet is the nearest representative of the company that's enabling and somewhat encouraging their frustrating behaviour. You make an excellent lightning rod, and I hope I'm not slipping across the line into personal attacks.

I still remain unconvinced that the behaviour of the FRR is what people would choose if they had a truly free choice; I suspect it's winning out because it's the easiest available option for automation. Aside from third-party bots it's very close to the only way to lend without paying close attention to the swap market on a daily basis, which holds appeal on an entirely separate dimension from whether it actually behaves sensibly as a 'fund'.

That is exactly right, it basically turns a margin position into a balance on one of your wallets.

I'm not certain, but I appear to be the first one here, so I'll try... I think that's a mechanism to allow you to take a profit in the currency that you bought rather than closing it back out into the other half of the pair that it started as.

So if you have a USD swap and a long position that's in profit, you can 'close' to convert all the BTC back into USD, pay off the swap, and keep the USD profit, or you can 'claim' to convert just enough BTC into USD to pay off the swap, and keep the remaining BTC as profit.

Anybody care to explain how the "claim" button works?

lmfao, is that why there's spikes in the historical rates charts? If you paid attention to your own exchange would see money leaving the lends in droves. You've lost 10% in the past week alone. This means the next spike will only be more violent.

I have no idea what you're trying to gain by calling me greedy and a troll. Act like a damn professional and fix your problems instead of hiding from them and blaming others.

You really don't add a lot to this conversation, so I am not going to "feed the troll" anymore...

Liquidity, is the ease with which you can acquire or get rid of something. In this case, it is a swap. Considering that there is around 2.5 million dollars of USD swaps available at the FRR, you can say that it is relatively liquid. In other words, I can very easily obtain a swap, and I can relatively easily offer a swap. The fundamental thing you are missing is that because it is liquid, if you cease offering your funds, no one will care...because of the mountain of funds at the FRR. It made up 75% of the offers on the book last I checked. So, if the fact that lots of people offer swaps at the FRR means that you don't offer swaps, then it seems we don't have a problem, because there are still lots of swaps available. If they were to cease offering their swaps at the FRR, you would not have a problem, and could offer your swaps freely, again not a problem. So in either situation, there is plenty of swaps available to enable margin trading.

That is the whole point of a market. If those swaps are all taken, and there are no offers on the book, any individual can choose to set a high rate and get filled with the very next margin order. So more funds will be added to take advantage of the sudden spike in demand. Since there is a lot of supply, and it is not being taken very rapidly, that is why I would say there is a surplus of supply.

HowardF created a bot that is meant to keep your money active, because as he says in his thread...

"MarginBot is  a PHP based Margin Lending Management Bot for the Bitfinex API.  It will do it's best to keep any money in the "deposit" wallet lent out at the highest rate possible while avoiding long periods of pending loans (as often happens when using the Flash Return Rate, or some other arbitrary rate). There are numerous options and setting to tailor the bot to your requirements."

So, he is trying to keep the funds being used constantly, and even says that if you choose the FRR, your funds are not as likely to be used. They will sit and wait, gaining you no return. So if anything, the FRR basically acts as a buffer FOR spikes in demand, because it is not very likely to be used as long as bots like HowardF's exist...

Anyway, I don't really think you understand much of how markets work, but I do hope you at least understand that you don't have to trade or offer swaps at Bitfinex...there are plenty of options out there. You should go explore those...

lol, mjr, do you even know what the word "liquidity" means? You demonstrate your incompetence every reply.

There is/was already a lot of discussion about FRR and I read a small part of it only.

Maybe it's a good idea to have at least two or three FRRs: short-(2-7 days), mid-(8-14 days) and longterm (15-30 days)

Finally, some non-FRR discussion. I am glad you are excited about this. I am too! I am working on the simulation environment exactly for that reason. It will give users the ability to test, and try strategies. I believe access will be limited to users who request it and are approved, but I think most people here are exactly the sort of users we want to encourage to test it out.

The API will remain the same, at least the current version (I think we will have a new version of the REST API at some point) and there will be other ways to access the backend. We are going to have the FIX gateway, and the websockets API.

The API will not be affected, because we have a "bridge" that will ensure that the backend can understand the current messages. Of course, all of this requires very rigorous testing. We are moving forward incrementally, and trying to stress test each piece, and run as many "corner cases" to try to catch as many bugs as possible before setting up the simulated environment.

So, basically, although the backend will be completely new, the frontend and the API should continue to function exactly as before. Thanks so much for your comments, I wish more people had responded to that part of my post... 

I have no doubt that MarginBot will beat the pants off of the FRR. It is designed to do that. You yourself have shown that it is EASY to set up, it generates more returns, and requires very little work. IF the users cared enough to research other options, then it seems like a no brainer to switch to using your margin bot. They don't seem to care enough...judging by the funds sitting at the FRR.

As I have said in the past, if everyone were to cease using FRR and switch to your bot, there would be more competition for returns, because that 75% of the available funds being offered would now actually be trying to get filled. That is how MarginBot gets better returns, by trying to keep your funds actually being used. It seems like a LOT of the people using the FRR are not getting any returns right now, because there is quite a bit of supply in front of them.

Long story short, your marginbot is available to anyone who wants to use it, probably offers better returns than FRR, can be "set and forget", and yet FRR remains a large portion of available margin. I think that a cursory search, maybe 15 minutes of research and thought would lead me to switch over to your bot, and it seems like a large portion of people offering swaps haven't put in that 15 minutes...

By the way, I believe that you said the default minimum for your bot is .065%? I couldn't find the post where you mentioned it. What would happen if everyone used your bot and left the default value on? A wall? What would happen next? Would people start placing offers in front of that wall? Would we still arrive at exactly where we are now? I think so...

It is funny, because "efficiency" means lower rates, and people argue that the FRR is not efficient. It is playing dumb with your funds. So, people seem to want someone who will compete harder with them. Someone who is really smart trying to beat them to offering a swap. This is what I don't understand. In no area would I prefer to have tougher competition if my goal is to maximize my success. I might hope for that if I enjoy the competition, but not if my goal is to maximize my success.

"As long as the majority of the market remains "lazy" and offering at FRR, rates will inevitably decrease. It's decreasing to the point where lenders, like me, are pulling money off." OK, and "why is that a problem?", is my question...

We do not care if the rates drop, or if people pull their funds, there are more funds chasing the limited trading than needed right now...which is why rates are low. Right now there is NO issue with liquidity.

"As long as the majority of the market remains "lazy" and offering at FRR, rates will inevitably decrease."

As long as tons of people keep offering their funds, there won't be funds available...that sum up the argument? Those people don't seem to care if the rate decreases. If they wanted better rates, they would start using HowardF's bot. There are currently around 2.5 million at the FRR, last I checked.

The main isssue, is that because YOU think they are making a stupid choice, you think that you should change their choice. Basically, like a competitor that offers a loss leader, in order to drum up volume, you as the person who wants to charge a premium have an interest in them ceasing that activity. I am not dismissing you as a greedy "lender". I am saying that you are free to offer or not offer your funds at whatever rate you feel is appropriate, everyone else is also able to do that. It seems like a lot of people chose to just accept the average of all fixed rate swaps over the last hour, that is the number they chose by using the FRR. You don't like that number, so you don't have to choose it. They are free to choose that number if they like though. I'm sorry you don't agree with THEIR choices.

So tell all the people CHOOSING to use the FRR "Stop being an idiot and start breaking that pile up into multiple tranches". You are conflating Bitfinex, the person offering this option, with the multiple people who are offering funds. We are not offering funds, those users are. If they CHOOSE to use the FRR, then it seems like a choice that they want to make (at least it is their expressed intent, if not their stated preference).

Howard had a suggestion for a minimum rate, I saw that you didn't. I was trying to basically respond to both. Yes, I personally always was a fan of allowing people to set a delta on the FRR, so you could say "Put out an offer at the FRR+.1%" meaning that you would get a better return than the FRR, IF the FRR gets taken. If you wanted to accept less, but have higher priority, you could put a negative value.

One quick note, whenever I refer to a minimum rate of 0, it is more like a limit in calculus than a number that I think would actually be used. People who will take anything, won't actually take NOTHING, but they would take anything as it approaches the limit.

As the creator of an unpublished bot very similar to HowardF's, this exactly. All the market participants act independently, currently FRR acts like a "blob". The only time it will increase is during liquidity spikes, which should be minimized/eliminated. That is, the only time FRR increases is when the FRR liquidity is already consumed. By that time, there's no liquidity to tilt the average up. Interest rates could be >400% annualized, but with no volume it doesn't move the average from the millions already lent out at low rates.

I can pretty much promise MarginBot's returns will be MUCH better then FRR when there are big flash runs.  It will catch those runs with significant portions of your money, and lend out at or near the top, while FRR will still be lending at a low average.  The problem is we don't have many runs like that, because the market is crap, and there's to much money available for margin.  If we're lucky we get one good run every 2 months.

(from my results by the way, I'm also fairly sure MarginBot is currently beating FRR by quite a bit in returns, and it doesn't take any effort to maintain at all.  10 minutes to set up, then it'll run all on its own for years and years.  I log into it maybe once a week, just to check my returns charts.)

You still think that the lend market is driven by supply and demand. FFS, open your eyes and use your head. I've explained before why FRR is "breaking" the lending market. You dismissed me as a "greedy lender". My whole argument has always been, and still is, when you ignore a very obvious issue in your market, you lose liquidity. Markets are never 100% efficient, you're assuming they are. By your own admission, there's a lag with withdrawing/depositing USD. For that reason alone, it's obvious why liquidity is an issue. As long as the majority of the market remains "lazy" and offering at FRR, rates will inevitably decrease. It's decreasing to the point where lenders, like me, are pulling money off. Demand has nothing to do with lend rates. When volatility is X% per day, a 0.0X% rate is nothing. What traders are increasing their volumes due to decreasing margin rates? Now what happens when BTC has a volatility spike? Margin traders click "buy" and, due to the volume, the lendbook gets obliterated. All the liquidity providers, like me? We left, because you claimed supply and demand would fix the problem.

You're a pro at demonstrating your incompetence. Please learn anything, even just the basics, of how markets, especially fixed interest ones, work.