You really don't add a lot to this conversation, so I am not going to "feed the troll" anymore...

Liquidity, is the ease with which you can acquire or get rid of something. In this case, it is a swap. Considering that there is around 2.5 million dollars of USD swaps available at the FRR, you can say that it is relatively liquid. In other words, I can very easily obtain a swap, and I can relatively easily offer a swap. The fundamental thing you are missing is that because it is liquid, if you cease offering your funds, no one will care...because of the mountain of funds at the FRR. It made up 75% of the offers on the book last I checked. So, if the fact that lots of people offer swaps at the FRR means that you don't offer swaps, then it seems we don't have a problem, because there are still lots of swaps available. If they were to cease offering their swaps at the FRR, you would not have a problem, and could offer your swaps freely, again not a problem. So in either situation, there is plenty of swaps available to enable margin trading.

That is the whole point of a market. If those swaps are all taken, and there are no offers on the book, any individual can choose to set a high rate and get filled with the very next margin order. So more funds will be added to take advantage of the sudden spike in demand. Since there is a lot of supply, and it is not being taken very rapidly, that is why I would say there is a surplus of supply.

HowardF created a bot that is meant to keep your money active, because as he says in his thread...

"MarginBot is  a PHP based Margin Lending Management Bot for the Bitfinex API.  It will do it's best to keep any money in the "deposit" wallet lent out at the highest rate possible while avoiding long periods of pending loans (as often happens when using the Flash Return Rate, or some other arbitrary rate). There are numerous options and setting to tailor the bot to your requirements."

So, he is trying to keep the funds being used constantly, and even says that if you choose the FRR, your funds are not as likely to be used. They will sit and wait, gaining you no return. So if anything, the FRR basically acts as a buffer FOR spikes in demand, because it is not very likely to be used as long as bots like HowardF's exist...

Anyway, I don't really think you understand much of how markets work, but I do hope you at least understand that you don't have to trade or offer swaps at Bitfinex...there are plenty of options out there. You should go explore those...