As an example of what I meant, here is a post that someone just sent me...
https://github.com/HFenter/MarginBothttps://bitcointalk.org/index.php?topic=865250.0Here is a bot for the swaps market that prioritizes keeping it active, it doesn't care the rate, it would just prefer that its funds are always in use. With no FRR, this would be the norm. The simple fact remains, that as long as people can get something, rather than nothing, they will probably take it. That being said, I really want to update the FRR, and hopefully it makes it more responsive.
Most lenders will not use that bot, and will instead opt to use whatever on-site autolending facility Bitfinex provides.
That said, if everyone did start using that bot, it would be a great improvement over the FRR. MarginBot places a range of offers, rather than dumping everything at a single rate. You can configure a minimum rate to lend at, as well as an amount of your funds to reserve for lending at higher rates. Everyone using it would configure it with different parameters to suit their tastes. We would no longer have the massive, market-distorting wall of offers at a single point on the offer book.
Exactly. FRR encourages building a massive wall at a specific rate, rather than a natural rate competition over a range of loans... it is very much the opposite of finding an actual fair market value.