So now, Bitfinex, tell us, that Bitstamp is down and possibly hacked: Do you have meaningful funds left on Bitstamp that could cause liquidity problems for your operation?
Wow, we've gone full swing to traders wanting outright manipulation and market fixing to protect their rates. The solution is quite simple, first, remove FRR. With the number of autolending bots, there's no need for it.
Second, put lend durations on their own books. Have, say, four lend books total, 2 day, 7 day, 14 day, and 30 day. This more accurately reflects how true fixed interest markets work. It would also prevent bid/ask from crossing. Additionally, because the lends are callable (the borrower can end the loan and return the funds at any time) borrowers can automatically take the best rate from any book they want. All the time duration risk lies on the lender and can be reflected in yield curve.
+++++
Barabbas is making some clever and useful proposals for changing the swap market and making it more efficient. I've already given up on BFX changing anything fundamental though and now it's merely a question for me whether keeping the funds on the platform is worth it or not.
Did the algorithm change already, somehow?
Yesterday, while there was HUGE demand for BTC-swaps in the selloff to ~$260, the BTC-FRR sharply DROPPED from about 0.11% to 0.07%.
The only way this could possibly explain that imo is:
- FRR calculation model changed or
- someone accidently lent out a big amount of BTC for 0.01 instead of 0.1, or some similar mistake.
Funny thing is that now that BTC swaps have risen in interest rate they seem to suffer from the exact same FRR related problems USD swaps have been plagued with. I'm wondering whether BTC swaps have only been so low the entire time because of the FRR related mechanics as even mjr seemed to be wondering about the normally super low rate of BTC swaps.