Quote from: MustMan on November 26, 2014, 06:46:42 AM

Quote from: mjr on November 24, 2014, 08:15:09 PM

Quote from: HowardF on November 24, 2014, 05:16:04 PM

Quote from: mjr on November 24, 2014, 04:13:06 PM

First off, this was my suggestion a while ago, and NO, that is not what would happen at all, because why would EVERYONE pick '-0.0001%'? Some people would pick '-0.01%' or -0.02%', and I still don't think that the "wall" is a valid complaint. It means that here is a bunch of offers which NOBODY TOOK. That means someone else's offer was taken. It means that all those using the FRR are NOT competing because they don't have active swaps. I love how people keep saying "you aren't going to get good rates using FRR, you should actively manage or use a bot", and then say that they can't compete with the FRR.

The problem with the FRR is that it creates a ton of offers at a very specific price point ( the wall ), which becomes so large that any active lenders are going to specifically target that number to undercut (otherwise we simply can't make enough money to be worthwhile). That means that unless there is a HUGH flash run, the FRR will constantly go down, because all the lends going out are below THAT SPECIFIC point. By spreading pending loans out along a much wider range, even with millions in pending loans, each specific price point would likely have very little waiting, so active traders would have more flexibility in choosing a target to undercut. This would create a much more natural moving average, up in heavy demand, down in light demand. As it is right now, I'd be willing to bet the vast majority of loans are always taken out just a few point below the FRR, which isn't a natural price flow at all, but a permanent strong downward pressure, regardless of current demand.

Quote from: mjr on November 24, 2014, 04:13:06 PM

Secondly, is there any way you could add your own FRR calculation to your bot? For example, could I either create or modify a bot that simply duplicates the current FRR calculation and offers at that rate? Again, I think it is interesting, because if everyone simply chose to use that calculation (as they ARE doing right now), the situation would be identical (besides the floating of the rate) and you would still get a "wall".

I wouldn't be able to create my own FRR unless I had access to all active loans via the API. Well, I could probably fudge something pretty close together based on historic market data, etc, but why would I want to? I'm only interested in algorithms that spread out offers, so loans can go out in a more natural spread.

Quote from: mjr on November 24, 2014, 04:13:06 PM

I just think that the "wall" that people are complaining about will always exist in that there are a lot of people competing for a fixed amount of demand, the people willing to go the lowest are the ones who make ANY return, and right now, you have people who are using the FRR in order to passively gain returns staying OUT of that competition at least some of the time (whenever there is a wall).

I disagree completely. If there would "always be a wall", then why doesn't this carry over to buying and selling coins? I don't always see walls on the orderbooks, yet we're competing for limited supply and demand there. Walls are not common in a traditional market, and are almost always the result of a single entity attempting to manipulate the market. Its just in relation to FRR, Bitfinx itself is the manipulator.

Quote from: mjr on November 24, 2014, 04:13:06 PM

So even though some people might complain, others seem to be jumping in front to push that rate lower...

We're complaining about the fact that the market feels very controlled and manipulated. If it were a natural flow market, even if the rates went lower as a result, I wouldn't complain. I would be happy to compete in a natural market, whatever the result.

Quote from: mjr on November 24, 2014, 04:13:06 PM

It continues to grow, because in my opinion, it offers an extremely great risk to reward ratio.

Despite my complaints above, I agree with this completely. Wink

That's why I'm still here, and its why I care. I'd hate to see this become untrue...

I agree with your points, and I am really glad you are part of this discussion now. That is the most concisely someone has summed up the current problems with the FRR, and it was why I suggested allowing a delta to offset from this current number. The other side of it that we are working on, is creating an FRR that moves more fluidly, this would mean that you couldn't just "set it and forget it" underneath the FRR, because that number would change every hour, and track the market better.

The part that always frustrates me, and why I like your comment, is because you don't have a rate agenda in mind. If the rate lowers without the FRR, you are ok with that. So, it is the most intellectually honest critique. Just wanted to say thanks.

I must say you are not that smart than I thought you should be.

You always preconceived with the notion that everyone arguing with FRR issues here must "have a rate agenda in mind".

The truth is most of people discussing FRR here cares more about free flow rates than kind of rate in their mind.
and this man-made distorted FRR system is broken as I said previously.

As HowardF said it well: Bitfinx itself is the manipulator.
and it is you Bitfinx that causes swarp rates not flow freely.

If it were a free flow swap market, nobody would complain and should not complain.

Because everybody would be happy to compete in this natural free market no matter how lower the rates is.

Edit: Despite you dealing with FRR badly,
I still think your are the best BTC exchange I can see and willing honestly communicate with its customers on public forum !

Edit2: imo, just keep the FRR only for reference , don't let it be the option to autolend, and this free the swarp markets !

one of the thing that amazes me is, whether one has a 'rate agenda in mind' or not is irrelevant to this problem / solution. I can only see BFX getting more in terms of trading fees and lending fees by fixing this god damn thing!