Topic: [OFFICIAL]Bitfinex.com first Bitcoin P2P lending platform for leverage trading - page 119. (Read 723903 times)

2586 & freakbits says it pretty well.  FRR is just completely broken.  When the LTC lending was first introduced - the variable rate was 0% and people were still lending at it!!!!  I sent an email to Ralphy on Jun 20, 2013 on that issue and suggested putting a floor or minimum markup!

I am quite disappointed, when I see mjr says backtesting on FRR, I am expecting change.  But BFX just dig in on their FRR is not broken position. Again, as I stated from my cynical perspective, it's even in BFX interest to keep the rate up - they get a bigger cut of fees, forces more action, etc.

The FRR acutally breaks any true supply and demand scenario because it allows lazy people who might not even watch the rate changes to drag down everyone else in a spiral, until some weird correction spike happens in large time intervals.
The FRR does this by
-reacting slowly to upward movements (not a primary reason though, just amplifying the effect somewhat)
-creating a negative feedback loop that does not ALLOW anyone to offer higher rates than those low ones provided by the lazy swappers (frr auto-renewers), only lower rates are ok (as you said about your own bot).

It's a forced spiral downwards fueled by telling people "just put your shit on auto-renew and you won't have to care about anything". Now it's of course right if people who do that will get low rates because they take the easy route. But thanks to the way FRR is implemented it will at the same time drag down everyone else who is not lazy.

The difference to a real supply and demand scenario is that here you basically say "oh, and everyone who is really lazy will automatically impact the swap rates downwards strongly". That's not something that would usually happen in a real market. If all my competitors in a real market decided to be really lazy, then MY PROFITS WOULD RISE, NOT GO DOWN.

The problem with the FRR is NOT that lenders aren't getting paid enough. It's the fact that it renders swap rate useless as a market signalling mechanism. If swap rates are prevented from rising, there's nothing to draw in more lenders to make more offers. Potential lenders don't know that more funds are needed until the offer book is practically empty.

I didn't mean it as a competition between traders and liquidity providers, but rather, as a competition between liquidity providers. Here is an example:

(No clue how to get images to work, this forum is the least user friendly way I have ever had to communicate in my entire life)

http://imgur.com/tXxSkRq

So, there is a "wall" of FRR offers, 1.5 million. There are people who are willing to trade a higher possible return, for a return right now, which is why there is half a million before you even reach the FRR. If you took away the FRR, it would not change the fact that rates will always be as low as the one person who wants the least return. There is a variable but finite amount of demand for swaps, call it x, and there is the response (supply) call it y. If y is greater than x, someone is not getting their funds used, and getting 0 as a return. So, it will always be a race to the lowest rate, with or without an FRR. My personal bot, simply looks to see what is the lowest rate and jumps in front of it. Most people would gladly take something, rather than nothing, and with or without FRR, that won't change. So we, as bitfinex, don't have any horse in the race, as one person mentioned, we would collect more if rates were higher, and it is doubtful that the volume is very closely correlated with the rates. The vast majority of the traders, IMO, don't check or even watch rates. So with whatever the current demand to open positions in, the person who is willing to settle for the least will be the first one to get a return. In other words, I feel like the group of people who wish rates were higher want to act as like a cartel, basically saying "if we all only offer at high rates, we will all get high rates", but in practice, it is impossible to prevent people undercutting.

Luckily, our volume is growing rapidly, and I think that as it continues to grow (we have been about half of the volume in USD/BTC lately), this will necessitate more swaps, and it stands to reason, rates will rise. I guess, the way I see it, is that people who currently use the FRR are basically saying "I will take whatever rate, I don't want to manage it, and I don't want to deal with it", and if you got rid of the FRR, they would just put offers a little lower than whatever the current lowest is, and in fact, could drive rates even lower (assuming that they want to invest the roughly 60-120 minutes to write the bot).

Like, I have seen other people complain that as rates go down, people close their swaps and get a new one for lower. That is going to happen regardless, there is no way to avoid competition, and if anything, I think that people who use the FRR are the ones who care the least about the rate rising (I could be wrong). One other thing, that I just was thinking of, was this...the way the FRR is calculated currently is public knowledge, so what if, someone wrote a bot to always offer at the currently calculated FRR? If enough people used that bot, the situation would be roughly identical to how it is now, and there would be nothing we could do to "remove the wall", because people can put their rates in as whatever they like.

I guess what I am trying to say is this, I know some people want higher rates, but the rates will always be just high enough to get you to offer the swap and no higher. That is not our policy, it is simply the way markets work. Markets try to find the most efficient price, and that is the price where the offerers are offering at, by definition, the lowest price. So, I personally think that a lot of the rage against the FRR is really a rage against competition in a market, and although we are obviously working to make a better tool, I think that no matter what we do, basic market competition is something no one can escape.

Do you have any screenshots? If you can email any relevant information to [email protected], they will take a look. Hopefully, we can figure out what is going on in this case.

Thanks. The problem has been solved by now.

Hey guys!

Never posted here but have lurked for a while. Anyway, I have been trading on bitfinex since march or so and never ran into this issue but a few times. This is on margin.

So a lot lately I have had my limit orders (both long and short) only partially fill when completely bought out with the remaining order canceled. The weirdest thing is that I will have varying amounts of remaining trade-able balance after the order partially fills.

I have enough of both BTC and fiat in by trading wallets for any fees for the amount I trade. I am really lost at what is happening and what I can do to actually trade the full amount.

An example, i set a short at $400 for 20 btc, a good $500 under my max tradeable balance. price hits, fills only 14.6358473 btc. Then my tradeable balance shows $1100 but it doesnt equal my total tradeable balance when added to the btc I shorted at that price, its off by atleast $1k-$2k. Then when I close the short, my tradeable balance is back up to normal.

There is no indication in my history of "insufficent funds" or anything like that, just a trade for the random amount of BTC it chooses.

I am getting very frustrated about this, I am losing money because of it and have no idea how to prevent it from happening. I have messed with the asset/currency fee feature but no avail. It fills my order when it wants to and doesnt when it wants to.

Thanks for the help,

Cheers

Just remembered an additional issue. I had a phantom short order put on my account of around 5btc yesterday. I can send my trading history and such. But there is not a single indication of it ever happening in my history other then when I immediately closed it. Was very very concerned.

Isn't the USD-FRR completely broken right now? There are lots of offers at ridiculously low rates and the FRR isn't even showing up. Is that a manipulation attempt to dump the frr? I'm not offering my swaps at this rate! It's even lower than in the most bearish weeks.

Same, hope it's only a temporary empty hot wallet issue like I thought too.

[EDIT] Update2: tried another 2 btc withdraw now and it went through nearly instantly.

Mine just went through as well.  Total time was around 2 hours, which isn't too bad considering the last couple days volatility.

I made >100s of BTC withdrawals from Bitfinex in the last months and it took more than 2 minutes in maybe 1-2 cases. I can definately state, that they are not "getting slower" or anything. Probably a whale cashed out and cleared the hot wallet.

Update: they went through now. "Only" a slowness issue it seems. Still problematic ^^'

Yeah, I've never had a problem in the past, and their support has always been really responsive, so I'm guessing it will be fixed quickly.  The volatility over the last few days probably ate away at their hot wallet, causing them to have to start pulling coins from cold storage.  I just hope there isn't  a huge drop in the next hour while I'm waiting to get coins to coinbase..... 

Same here, sent an email to support, a bit ago, but thought it was only an issue with my account. Withdrawals stuck in processing, one for over 2 hours now. These kind of issues have been pretty rare and they usually solve them quickly, let's hope cause it's causing me problems.

Anyone else notice withdraws going slower than normal today?  I requested a withdraw more than an hour ago and its still processing.  Usually it takes less than 10 minutes to get coins out...

I actually believe BFX has a vested interest in ensuring the interest rate is high - they get a cut of it.  In theory, the high interest will cause more trading as "buy-and-hold", if they are any of those holders left after the fall to $280, get prohibitively expensive.  Trading also generate more fees & volume!!!

I have actually stated that in the past.

Why has Bitfinex changed BTC deposits to 3 confirmations before it get credited? This sucks!!! 

I see what you're saying, and I'll admit... the current setup seems very good at keeping rates low most of the time and as a lender I'd love to see them higher, but all the same, I'm skeptical of the idea that the swap market is as efficient as you seem to think. From what I've seen there seems to be (1) a large pool of people who take swaps in the course of trading without looking at them and without much caring what the rate is unless it was ludicrously high; the difference between (say) 0.1% and 0.11% wouldn't register as important enough to pay attention to, and also (2) a large pool of people who lend on 'full auto' or near to it, not wanting to devote time to figuring out an optimal rate and willing to lend at almost any rate down to near-zero.

If you graphed out a supply/demand curve for that, I'm imagining a long segment on both curve where they're close to horizontal - varying the rate having almost no effect on how much demand there is (because demand is primarily driven by traders wanting to capitalise on price movements, unrelated to the rate) or how much supply there is (because depositing/withdrawing fiat is enough of a hassle that it's easier to just 'let it ride' even when rates dip down). If anything supply is likely to vary most by people taking cash out of swaps to trade with or vice versa, again correlating it mostly with price movements in the bitcoin market.

So in a 'pure' market there would be outcomes where the amount of supply/demand at those horizontal segments are significantly unequal, and the rate either skyrockets or crashes depending on which is the largest, and a somewhat less well defined outcome if they're approximately equal, where the horizontal segments intersect and the rate can just freely wander around at random between the point where traders as a whole start to strongly notice their swap costs and the point where lenders as a whole decide it's no longer worth bothering with at all, which is a huge range.

The FRR acts to pick a rate in that range and cluster everyone around it... for all the lip service to a supply/demand market, most of the time the FRR is the rate that everything happens around and your method of picking it makes it slow to react to upward movement but faster to react to downward movement (longs become more in demand => FRR wall absorbs all the extra demand without raising rates for absolutely as long as it possibly can, longs become less in demand => traders cancel their more expensive swaps and the average rate craters).

I feel like the impression you're getting of everyone just wanting higher rates is a result of the simple fact that people who want rates held low have nothing to complain about because the system we have is already doing that so effectively. You seem a little dismissive on that basis but I'd be wary of setting aside complaints just because the people making them seem 'whiny'. People are always going to complain, and always going to be biased, but it'd be nice if there were approximately equal numbers of complaints coming from both sides.

@mjr
In future version, the "performance summary" is improved too? For e.g., I'd like to know my interest earned since beginning or on a montly basis.

Haven't been back for a while.  Finally nice to see someone who believes FRR is broken.