6) Any trader with more than 3 neurons should understand why we try to protect liquidity providers.
They are the reason why traders can take leverage.
No liquidity providers, no swap, no margin trading.
Every trader should think about this before he start considering the liquidity provider as a blood sucker.
The liquidity provider is the one that makes it possible, and therefore he should be protected for the sake of the leverage, not because we think they are more beautiful than the traders.
+1
If lenders were wiped out then, the vast majority of them would no longer want to lend at Bitfinex again. No liquidity providers means no margin trading. Any high risk lenders left would be demanding daily interest rates consistently exceeding 1% per day, perhaps even up to 5% per day. This would make it so expensive and not worthwhile for margin traders that it would effectively kill Bitfinex's margin lending facility. This would not only be bad for Bitfinex, but for Bitcoin in general and the news of lenders being wiped out would no doubt spread to the mainstream and average Joe's would be given another reason to not to get involved with Bitcoin.