Feel free to post any suggestion.
We will pay you if they make sense.
Otherwise just stop talking nonsense.
Giancarlo
Bitfinex Team
I like to take a shot at the bounty.
Look at your existing measures. For one, you manage the leverage ratio. When the market is volatile, you tighten it, and vice versa. This is good. But volatility over days can be managed, how about volatility over minutes?
Suggestion: Keep this measure. Work on transparency and communication. Transparency - Define volatility in the context of leverage ratio. Communication - Make the leverage ratio prominent for margin traders on your website.
For volatility over minutes, there is no need to reinvent the wheel. Look at what the major exchanges are doing and adapt it accordingly. The basic principles are the same: Buy high sell low, leverage, panic sell during crashes, fanatic buy during rally. One word: greed. It is not the exchange owner's responsibility to manage greed but you certainly do not want them to lose everything. It is bad publicity.
The common measure is a circuit breaker which depends on 2 factors: price and time.
Suggestion: Implement a circuit breaker. Consult users on: Extent of volatility, halt duration and additional measures when halt is lifted.
Other measures are a possibility. But you certainly want them to be easily understandable and implementable. Measures too innovative (defined as measures unique to BFX) will cause confusion. It is good to consult users too before implementing any measures. One way is to put up a vote. You make the final call using users' preferences as a reference.
I generally agree with this. I'll post more suggestions if I think of anything.
I just want to add that throughout these tough times for the market and Bitfinex, I was really impressed with the responsive customer support by Giancarlo and Raphael. They have a really tough job in making the first and only BTC margin exchange, and while they may be compensated well when the markets aren't crazy, they're certainly taking big hits and eating huge losses when things don't go well. While I don't have a ton of experience in trading on leveraged exchanges, it seems like these experiences will allow them to make corrections necessary and possibly adjust the site's risk profile. Unlike MtGox and the many other shady businesses we've seen so far in the Bitcoin space, these guys are always available, responsive, and giving it 110%. Thanks for the great service, and I'm pretty confident you guys will find working solutions.