BFX,

You need to institute circuit breakers. They might look something like this:

Each day breakers are triggered when the market falls 20% (?) from the day's opening price. At any point when the market falls to -20% the minimum ask becomes -20%, fixed for a set period, say 30 minutes. After 30 minutes prices are then free to fall an additional 10% etc.

So take yesterday for example. Assume the opening (12:01am?) market level was $700. So if the market fell, the min ask would be $540. As the market collapsed below that offers would not be accepted below $540 but the system could accept all bids. In this way there is a 30 minute window for trades to be entered/matched in an orderly manner.

You can structure the circuit breakers to try and protect lenders, if that is your aim, but recognize that when you have a policy for managing fast markets, it is very bad form to change the rules on the fly.

Many markets use circuit breakers to positive effect. We are not inventing the wheel.


Today you basically raped traders to protect Bitfinex' lending function. Not sure why any trader would put themselves in that position again. I had submitted a Market Order to buy at about the $550 level ... thanks a lot.