Re: [OFFICIAL]Bitfinex.com first Bitcoin P2P lending platform for leverage trading
I would much, much more prefer leverage back to 4, no insurance whatsoever for standard swaps and building up of an sufficient insurance fund for those who want to pay 30 % to insure their loan. That would feel like engaging in a total return swap and not like putting your money in a savings account. Let's see how many people were willing to lend out their money at 0.0842 % after one or two flash crashes in which they lose 10 % of their deposit.
The insurance was a bad idea. In a serious market you would have something like call liability for the traders which a hong kong magic internet money trading company would unfortuantely not be able to realize though.
The insurance was a bad idea. In a serious market you would have something like call liability for the traders which a hong kong magic internet money trading company would unfortuantely not be able to realize though.
Please understand there is no "insurance" in the normal sense of the word. If the market crashes/BFX gets hacked/exploited/etc., and the losses for lenders are higher than the reserves of BFX (which, as they indicated are about $1.5 millions), then money are lost for good and nobody will give them back to you. The recent announcement was basically a (poorly worded) justification to remove the "insurance pool" of $50k, which btw one might also argue that was no insurance at all due to our inability as users to actually check that those $50k were in an account in the first place.
Also, i don't think the drop in lending rates has anything to do with the newly announced "insurance". Do you really believe that people who use their brains assumed that their money are somehow now magically safeguarded by the Bitcoin FairyGodmother, and went on a "lending spree"?
