Quote from: arbitrage001 on February 15, 2014, 01:35:57 AM

If I have to guess, some whales are taking their money elsewhere.

My guess is, margin traders got burned badly on Feb. 10th. Almost all of them were forced out of their positions, some traders wiped out completely. Now the swap market is damaged, because of lack of borrowers. No borrowers -> some lenders, including me, will find greener pastures. Today's 0.09% swap rate is about 30% annualized. Faced with that, I think I'll try my hand with stock picking instead.

A similar crash took place in another margin trading platform, BTC-E. IMO, the point was to force margin traders out of their positions, and buy back at cheaper prices. Bitfinex should protect their clients and their business against this kind of 'predatory trading', and prevent the biggest flash crashes. Many stock exchanges and futures markets automatically freeze trading, when the prices fall a certain amount. A five minute automatic freeze if the market falls e.g. 20% in five minutes, could prevent these manipulated crashes from happening.

Another problem with the swaps is, there is an imbalance between time frames. Borrowers want 30 days, lenders offer 2 days. This is not a problem in itself, but when they're placed on the same orderbook, the supply and demand do not meet. Two-day lenders are happy with whatever return, while those willing to commit capital for 30 days, naturally want more. Therefore, Bitfinex should enable filtering swap offers, e.g. 'less than a week' and 'longer than a week'. In this way the borrowers would get more realistic picture as to what kind of rates they need to pay. I made a sample of what it could look like. By clicking '8 -30 days', it would only show those offers.

http://i.imgur.com/1LyYJpw.png