Should exchanges ban margin trading and adopt Dividends/Interest based on time

timerland

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Are the cryptocurrency economists awake or the discipline is yet to come out of infancy?

Damn, those are strong words.

I think that your argument makes really close to zero sense, though. While banning margin trading would potentially decrease instabilities within the market caused by people trading on leverage, it also causes a concern as to the lack of short positions that keeps the checks and balances within an overheated market (watch khanacademy if you don't understand this concept), as well as the fact that you're essentially restricting what people can do with their funds with decreased liquidity overall. Why do that, when it comes down ultimately to virtually no improvement in anything?

Whether or not an exchange decides to go with a dividend sharing model, or pay interest to deposits, is entirely up to them. At this stage though, there is simply not enough liquidity and way too much credit risk within the BTC denominated credit market for exchanges to comfortably offer a guaranteed interest rate like a bank.

Schirer

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I dont see why merging trading should be banned, it is allowed in forex trading then what is different in crypto market.. it is customers chose to use it or not to use it.

Dividends and interests could get more attention from regulations if this is applied in crypto sphere in large scale.

FanEagle

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This is bitcoin world and I believe nothing should ever be banned. If you want to be rewarded for holding than just go with a stake or a masternode coin, they are making you money for holding and they are losing value as well. Just because you want bitcoin to not lose value doesn't mean we should change the whole concept.

If we do play with bitcoin itself to make more money for us than we are not different from the bankers that we created bitcoin against. They are printing money and paying themselves bonuses and calling it fair so we should just let bitcoin be as it is and not change anything about it so we can continue to fight for decentralized economy as well.

Oilacris

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Quote from: cabron on May 20, 2019, 12:36:55 AM

Dividends are more destructive to their business. If you put yourself in their shoes, they would have to market their project massively to make more money to distribute to the investors, that won't be a sustainable model for starters. We've see this with previous projects like the EOSex which part of their promise was to distribute dividends to their token holders, look what happen to them now.

This is true and im also an investor with Eosex but look at them now and as being said this wont really be sustainable for starters if they do take a risk

on that dividend system then they do know the risk if they would failed to extent out specially with the marketing side of their platform.

chaoscoinz

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Quote from: bitliteethdashneo on March 19, 2019, 09:16:48 AM

Hello All,
Since the cryptocurrency depression starting last Feb, many of us have reluctantly held cryptocurrency
seeing it fall over and over again. But HODLERS' resolution has kept it from falling further.
Should people who have held cryptocurrency continuously not rewarded suitably?

One way was to fork which have stopped happening , even when recently ethereum forked it did not
give rewards but just an improvement for stability. How does crypto community expect those who are mining
to survive in such conditions?
The other way was margin trading which continuously bring down deposit in form of fees.
Not sure if cloud mining reward options are still in place.
Wallets like Nexo expect stablecoins !

The only people who are always on profit were crypto exchanges.
Where are equivalents to dividends and interest to survive and compete with dollars and share markets.

Are the cryptocurrency economists awake or the discipline is yet to come out of infancy?

Sounds like an SEC nightmare waiting to happen. Anything crypto related involving securities (dividends) is subject to the U.S governments wrath. Then you have the Treasury, the Commodities and Exchange commission. It's a headache and a half.
Of course, if it's legally compliant, registered and approved to go, then it sounds like a great idea, as there is nothing wrong with earnestly recieving passive income.

yusupjatigumilar

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Actually, in my opinion, the exchange does not have to be to eliminate margin trading and replace it with dividends because if this is done then the volume of transactions at the exchange will be low and I think it will also affect the commodity traded at the exchange because people prefer holding to get profit without making a sale or purchase transaction, of course this will make the balance of supply and demand become unbalanced and make prices lower.

cryptjh

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As long as people want to make margin trading there will be exchanges that will offer ways to make margin trading. Exchanges can make a lot of money this way, so why should they end this business.
Earning dividends from an exchange is a nice way to get some passive income, kucoin exchange offers dividends to holders of their tokens, but you need to hold so many tokens that it isn't worth it.

davis196

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Margin trading is nothing more than short term loans that the crypto exchanges are lending to the crypto traders.The exchanges are making money from interest rates and fees from those "margin trading" loans.They will never abandon this revenue stream.
Paying dividents/interest to the traders will lower the crypto trading platform's profits.Why would they lower their own profits,just to make the traders happy?

sheenshane

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Margin trading was made available as an option only. So there is no point of banning it as the risks and responsibilities were taken by the owner. We are not allowed to ask for dividends and so on because this is a decentralized currency. If you hold your assets then that is actually your choice.

I don't understand why but I just wanted to remind you that cryptocurrency is totally not an investment. So dividends and interests are not provided. Whenever you convert anything to Bitcoin, it doesn't necessarily mean that you can consider it as an investment.

cabron

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Dividends are more destructive to their business. If you put yourself in their shoes, they would have to market their project massively to make more money to distribute to the investors, that won't be a sustainable model for starters. We've see this with previous projects like the EOSex which part of their promise was to distribute dividends to their token holders, look what happen to them now.

valta4065

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Quote from: rijaljun on May 19, 2019, 11:49:52 PM

The problem is it's hard to have a security tokens as certain countries prohibited their citizen to buy or hold security tokens. Exchange that use security token will obviously lose many users from big potential countries. Exchanges do business and it's fine for them to get bunch of money from their users as profit. Anyway, traders would choose exchange with lowest fee, it means we don't really be afraid of exchanges' profit, and we don't really need this dividends.

Along with peoples going for exchanges with lowest fees, i think peoples would also love to invest in Dividends or Interest based coins which has the potential to make you have a stable income. If you want to be rich in the future, there are few things which you should start applying now onwards. Rich peoples would never work hard to earn money but instead they would calmly sit down and watch their money growing.

Also considering the fees, peoples trading smaller amounts are in strict need of exchanges with lowest fees. There usually is risk for small amount traders that they might loose all their earned profits into the fees so fees should always be given priority to make yourself earn profits.

rijaljun

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The problem is it's hard to have a security tokens as certain countries prohibited their citizen to buy or hold security tokens. Exchange that use security token will obviously lose many users from big potential countries. Exchanges do business and it's fine for them to get bunch of money from their users as profit. Anyway, traders would choose exchange with lowest fee, it means we don't really be afraid of exchanges' profit, and we don't really need this dividends.

pushups44

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We are seeing an increase in custodial services offering interest for staking or depositing with them. I believe Coinbase will be offering this, and another service offers up to 6% interest on BTC and ETH. Soon ETH, ADA, and other coins will be rewarding stakeholders for simply holding coins. The dividend/interest issue will resolve itself as proof of stake is further developed and becomes widely adopted this year and the next.

As for margin trading, I don't see it as contrary to the growth of the industry, so long as the exchanges abide by reserve standards for financial brokers, of course also taking into account the volatility in the industry.

Genemind

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Quote from: Adriano2010 on May 18, 2019, 01:45:10 PM

I don't they should ban margin tradings, they always get money fr trading, but ideea to give some interest is good if hold coins on that exchange or if do trades is a goor ideea to give something back, maybe this will attract more people to trade and use an exchange.

I agree with you. It's another way for exchanges to gain profit and for some traders to make profit out of their borrowed funds. It contributes a lot in the success of an exchange.
It's another asset of a trading site so banning it would only provide disadvantages.

Ailmand

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Quote from: CryptoBry on May 19, 2019, 02:02:58 AM

Quote from: HouseStark on May 18, 2019, 07:46:40 AM

Well, I guess you're right but I don't think they should ban margin trading either. Fact is that, the exchange is doing anything to make profits so far as people will do and so that's not gonna happen (banning margin trading). Secondly, exchanges keep the huge money they make for security reasons buddy! We may see them having huge reserves but trust me, one single security breach can cost them the whole company and so they always have to get "huge reserves" (you know, for the future unexpected)! Anyways on the real, yeah traders deserve some dividends but personally I don't see it as an obligatory task of the exchange...it's somewhat just a grant.

Banning margin trading may not be the best idea especially for all exchanges because they are also making money from those transactions...and transactions is part and parcel of the lifeblood of any exchange. I do consider margin trading as a very option for traders to work with...a great way for anyone to make some money out of someone's else money making thing more exciting and I guess potentially profitable for a good player. However, I love the idea of bringing benefits to the HOLDERS. And I think there are now many projects doing that today by stacking their tokens or coins but this is not yet true with the main and top cryptocurrencies so that we rely on the upward movement of the price itself.

Margin trading is one of most exchanges' ways to keep the platform running. We cannot blame crypto exchange from profitting because it actually takes a lot of risk, task, effort, and money to keep an exchange running.

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Should people who have held cryptocurrency continuously not rewarded suitably?

Well if HODLing will give holders reward this will not push adaptation and bitcoin will not be used as how it was intended.

traderethereum

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That is what happens in the cryptocurrency, we see the cryptocurrency is fluctuating, and we need to get a low price if we want to prevent from worried of the falls of the cryptocurrency like what we had in the last year.
I am sure that the miners will survive especially for the miners who have a big hashrate or power in the mining section.
I don't think that the exchanges will always depend on profit because I am sure that many traders can get the profit too besides the exchanges.
And why the exchanges should ban margin trading if they can make a profit from the trading itself?
That is because the traders can see something that we might don't see.

fiulpro

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This is something that everyone wants , unfortunately the last fork that we saw wasn't even supported by most wallet this unfortunately not everyone was able to receive it.

Forked coins unfortunately just adds in the pile of already 1000 more alternative currencies therefore the developers don't want to again pile up a stack and then again it's something that has both good and bad sides therefore right now they are thinking of focusing on Bitcoins maybe , who knows ?

CryptoBry

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Quote from: HouseStark on May 18, 2019, 07:46:40 AM

Well, I guess you're right but I don't think they should ban margin trading either. Fact is that, the exchange is doing anything to make profits so far as people will do and so that's not gonna happen (banning margin trading). Secondly, exchanges keep the huge money they make for security reasons buddy! We may see them having huge reserves but trust me, one single security breach can cost them the whole company and so they always have to get "huge reserves" (you know, for the future unexpected)! Anyways on the real, yeah traders deserve some dividends but personally I don't see it as an obligatory task of the exchange...it's somewhat just a grant.

Banning margin trading may not be the best idea especially for all exchanges because they are also making money from those transactions...and transactions is part and parcel of the lifeblood of any exchange. I do consider margin trading as a very option for traders to work with...a great way for anyone to make some money out of someone's else money making thing more exciting and I guess potentially profitable for a good player. However, I love the idea of bringing benefits to the HOLDERS. And I think there are now many projects doing that today by stacking their tokens or coins but this is not yet true with the main and top cryptocurrencies so that we rely on the upward movement of the price itself.

Beerwizzard

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Quote from: bitliteethdashneo on March 19, 2019, 09:16:48 AM

Should people who have held cryptocurrency continuously not rewarded suitably?

They saved their coins in order to sell it later for a better price. That would be their reward. We shouldn't try to somehow stimulate them.
Margin trading creates big part of BTC price. It makes its MC bigger and the currency becomes more resilient regarding any big sell orders. This is what makes the difference between Bitcoin and some other shitcoins with lower trade volume: you can sell $100 worth of shitcoins and dump the market.

Adriano2010

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I don't they should ban margin tradings, they always get money fr trading, but ideea to give some interest is good if hold coins on that exchange or if do trades is a goor ideea to give something back, maybe this will attract more people to trade and use an exchange.

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