What lenders must realize, is that swap rates are 100% controllable by them. If coordinated just a bit, the rates can be held at no less than a agreed upon minimum. The reasoning, especially for a big hand is that "I'd better get less than usual, than nothing at all", which obviously backfires. Moreover, when one posts a lot lower rates than wanted, he/she typically sets shortest duration possible (2 days) in hopes for rates to improve, so that new offer can be made 2 days later. This, backfires even more, because without major market movements and all existing swaps expiring every 2 days, the rate decrease is amplified even faster.
So, if Bitfinex team does not feel that "capping" the lower end of lending (and perhaps cancelling the FRR for better rates discovery) is a viable option for the system, the only solution I could think of and AM suggesting, is for those concerned to get together and communicate the strategies to each other in some sort of a "club". If anyone knows about the existence of such group, please let me know. If not, feel free to PM me and we can think of something together.
Another, very easy to implement right now suggestion, in attempt to recover the rates, especially to those who already stated (just above) that you do not wish to lend at the current rates, let's see if we can indeed communicate a bit. As the first step, I suggest you to set your offer to 0.09% (even) not less. I personally agree with your reasoning, I am NOT lending at 0.05 and I did set my offer to 0.09% even, please go see and join. I also have other swaps expiring in about a day and set my autolending to 0.09% as well.
That's funny! :-)
How about "no, the liquidity
takers controll 100% of the rates!1!!"
I don't have to state that the rates and FRR are set where those two groups meet, do I?
I'll gladly pay higher rates than now, when we leave the bear market. Do you have any idea how expensive it is to go through five months of bear valley with any "reasonable" rates? In no way would I take anything even close to 0.9%. Wake me up when we crossed the ATH, then we talk.
In other news, I lend out a smaller position since January too.
Ente
Sorry, can we make at least a little sense here? I have no idea where are you coming from with your reasoning.
Once again, "liquidity
takers" can ONLY take what lenders are offering, absolutely not the other way around. Market conditions do obviously have an effect on rates, but purely technically, it is only the lenders who determine the rates, 100%. For instance, if hypothetically lenders do somehow manage to agree on the lowest rates they wish to offer all together, then THIS will be the rate, which "takers" WILL have to use (or pass of course).
"...I don't have to state that the rates and FRR are set where those two groups meet, do I?...." <-- I do not see how is this even relevant. The "two groups meet" all over the place, FRR is just an average of that process over time. I personally "met" several traders at 0.1085 a few days ago, we are still doing business right now and this value is NOT where the FRR has been for a while now.
I do have a perfect, first hand and quite extensive idea about how expensive the loans can be. No one is forcing you to play the "sideways" market, I don't and that is why I am currently lending. No one will be "waking you up", you'll need to set you own alarm that would float your own boat.
P.S. Did you mean to say 0.09% or you did say 0.9%? If 0.9% I agree, a lot of traders, would most likely prompt for lending.
) sounds this evening or during the next days so stay tuned.
