Re: [OFFICIAL]Bitfinex.com first Bitcoin P2P lending platform for leverage trading
In addition, the lending fee is now up to 15%, which is a huge increase. I highly recommend removing the flash return rate to allow for more efficient rate discovery instead of having rate artificially manipulated (I know Ente has other opinion on this), as borrower always have option to return fund early but lenders can never recall. Margin loan outstanding approach $16 million yet interest yet the FRR keeps declining.
lastly, there's no more mention of lender insurance, so I suppose that is gone completely, or are all lender funds now 'insured'?
lastly, there's no more mention of lender insurance, so I suppose that is gone completely, or are all lender funds now 'insured'?
Announcement story is that:
"Another reason for removing swap insurance is that we have decided to effectively insure all swaps on the platform."
I take this to mean that all swaps are now ensured by BFX and that the enormous total scandal fee hike for lenders is meant to cover this. I'm not sure why the word "effectively" is there, though. It's really binary, either swaps a) are insured OR b) swaps are not insured.
As for the Flash Return Rate: My personal experience is that if you place offers above it and wait then your offer is taken eventually. Many people like to place fixed rate offers below it and that moves the average rate of all loans and therefore FRR down. There was 20,575,746.50 USD of outstanding swaps on February 6th 2014. That means that there could be quite a few million USD that's either withdrawn or spent to buy BTC or waiting in the shadows right now. A low rate is better than nothing and perhaps people with millions of USD and no girlfriend to spend it on figure that FRR is better than nothing.
Me so confused on this fee stuff 
Such confusion. Wow.
I can put up with a 5% fee increase if everything is insured. But who's the provider and how do we know they can cover for the $15 million out there? Is there a cap? Does it keep up with the loan book's growth. The loan book more than double in a few months. If BTC flash crashed to $100 and stay there for a few weeks, can the platform stay solvent?