Topic: [OFFICIAL]Bitfinex.com first Bitcoin P2P lending platform for leverage trading - page 128. (Read 723903 times)

I'm open to suggestion.  Appeals to logic certainly do not seem to be working.

we must think of an incentive for Bitfinex to change anything regarding this FRR.
All arguments are of no use when we can´t manage to convince them.

I don't know if I would use it.  It would be an interesting option for 'fixed rate' lenders to compete with the FRR.  Of course, if Bitfinex applies it to the FRR or only allows the option for the FRR it will be the death of fixed rate lending.

I might take a minor philosophical issue with the idea of swap returns depending on whether the trader is profiting or not - it makes it unpredictable what rate I'd actually be getting.

 Part of the appeal of swaps for me is the part where I don't need to care too much about what the price is doing, because once the terms are agreed my return isn't dependent on it (might affect what the going rate for swaps is, but beyond that I'm price-agnostic). But then, I don't intend to use FRR either way, so... I guess do whatever you want with it.

I did comment on this earlier.  My concern would be that the lender is getting the lowest rate when the swap is most vulnerable (the trader is losing).  Of course if swaps are as risk free as Bitfinex purports them to be, I would not have any philosophical issue with this.

With everything Bitfinex has said so far, yes this is normal and the FRR has nothing to do with it.  The only issue is that rate calculation, not the FRR, needs tweaked.  Unbelievable isn't it?

I am getting so frustrated with this that I am going to have to drop out before I say something I will regret.
 

I would have extensive stats I could share if someone writes and releases a parser for the log files. (https://www.bitfinex.com/offers)
This is something I'm also interested in, but haven't yet gotten around to try to find out. Unfortunately the log file seems to lack the critical information of when an offer was actually taken and when it was returned...

Edit:
Unused and margin swaps seem to contain that info though. Might not be too hard to parse after all?

I think rates matter more for people with longterm positions.   It'd be interesting to know how long the average position lasts.  Or how many positions are only several hours, several hours to a day, one day to a week, one week or more.  These are statistics that BFX could share.

Looking at my experience of about 1.5 years lending money at Bitfinex I have to agree here: Many (most?) traders don't really seem to care if they pay 0.1% a day or 0.9995% a day or 0.15% a day in swap if the prices move several % anyways.

Since nobody seems to have noticed it, I have suggested an alternative flexible rate that would be similar to going long on BTC while lending out USD: have a low % fixed rate while the trader's position is negative and a high % profit share (+ probably the standard FRR+x% on unused funds, to prevent abuse). This means someone who is unlucky in trading only pays e.g. 0.01% swap, but if the prices go up, they pay e.g. 20% of their earnings to the swap provider (both numbers are up to the swap market of course). People offering funds under these conditions would be betting quite hard on the market going up, but might choose not to trade themselves for example because they don't want to deal with closing positions or the risk of down swings.
Interest would be checked hourly(?) and debited/credited daily from traders to lenders, as it is done currently.

Just out of interest btw.:
Let's say there are 2 hours of 1% FRR, 20 hours of 10% FRR and then again 2 hours of 1% FRR --> how exactly is the amount due at the end of the day for FRR calculated? The FRR at a certain time of the day, an average over the FRR the whole day (sampled at which intervals?) or something else?

Over a thousand independent offers have decided to put over 2.2 million dollars at 0.0909%. Who would have thought.

Thanks!

They get liquidated before that can happen. If that is not enough, Bitfinex claims to have some vague "insurance" that would cover the difference.

Noob question:
What happens if someone can't repay? There is no swap-taking-user-information available.

The cost of swaps has a minor role in the demand for swaps.  The demand for swaps is driven almost solely by the price movement of bitcoins, it is not dependent on the swap cost.  If bitcoins are going down, no trader is going to show an interest in taking a swap even if its 0.0001%.  The swap market is not driven by supply and demand of swaps until the price or perceived price of bitcoins is rising; it subservient to the whims of the bitcoin market.

Once that demand has be created, by the bitcoin price, not by the swap price, the acceptable swap cost is dictated by how much or how fast a trader thinks the price of bitcoin will increase.

To put this as simply as possible, market for swaps is driven by the rising price of bitcoins, not the cost of swaps.  Can we agree on this?

Yes, it took a while to show, that's what got me confused.

but now everything is fine, thanks for the help

This suggests to me that you already have an active swap using those 2 BTC.

Go to the swaps page, make sure you're on the "BTC" tab, then click to open the list of "Swaps currently provided" - is it in there?

Small noob question here... searched allover the web but couldn't find anything

I send 2 bitcoins to my Finex account My balance is showing that I have 2 bitcoins


BTC   2.00
BTC Swap total:  2.00
BTC Swappable balance:  0.00


However when I create a Swap (30days,0.003,1order of 1 bitcoin)  order it states I do not have sufficient balance.

What did I do wrong>

Hello, I have a problem with the API, "POST /balances" call... it only appears to return balances in BTC and USD, no LTC/DRK/TH1.

Is there some extra fuction or parameter I am missing?

It's undeniable that a wall means an excess of supply at that price point, but I think it's arguable that it's being supplied at that particular price point only because the FRR is the only option for automated swaps, and has bent the market around itself. It's not that lenders have come to a reasoned decision that the FRR is the price point they want to set their rates at, it's just the only way to pick a rate automatically that's minimally market-sensitive. Making it more sensitive, so it adjusts upwards more quickly after it gets eaten, would be a positive improvement... prevent those somewhat-ridiculous occasions where the rates offered are "FRR: 0.06% ... nothing until ... fixed rates: 0.6%"

I'm wondering now if there's any improvement to be had by drawing a parallel to TCP's rate-setting mechanism. For those who aren't familiar with networking protocols, TCP carries traffic across the internet and dynamically adjusts the rate it sends data at to try and saturate your connection while avoiding causing congestion. Each time it gets an acknowledgement of a successfully received packet it increases by a linear amount, but as soon as it detects failure it "backs off" by cutting its rate in half to rapidly alleviate the congestion it assumes caused the packet loss (it's more complex than that in reality, but that's the simple version).

By analogy, if we take "the wall" as a simple fact of life, and treat "the wall has been exhausted" as a strong signal that the FRR rate is too low... could try simply doubling the rate whenever the total offered at the FRR goes to zero. Would solve the problem of it not responding quickly enough to increased demand. Although, I'm not sure how to handle the "linear decrease" portion once it's uncoupled from the average of fixed-rate swaps, and anyone with substantial existing FRR swaps would have quite the incentive to trigger the doubling mechanism as often as possible. Would at very least need to cap how often it can happen to prevent it being gamed.

I think that both of these are right. The key issue with the FRR is not that a lot of money sits there. It is that it adjusts too sluggishly. So it does keep the rate lower when it is rising, and keeps it higher when falling. We are mainly focusing now on how to make it more agile, because we still think it is a useful tool, I also really appreciate someone mentioning that if there is a wall, that must logically mean that there is an excess of supply and rates should be lower. If there was demand at that level, there would not be a wall. I am somewhat curious about the price sensitivity of the margin traders and I wish I knew more about how many people would actually not place a trade because they don't like the swap rate.

This is an interesting discussion, and I am still listening to anyone else's thoughts.

-Josh