The lends are callable, meaning the borrower can return the loan at any time. I think interest is computed every 4-6 hours, but only paid out daily. I could be wrong.

It seems to me converting FRR lenders into bot users is a compromise now? I agree with it for reasons mentioned elsewhere; it breaks up one massive order into many small ones. It will allow the market to adapt more easily to liquidity spikes, rather than letting the FRR dam break.

I would reiterate the recommendation that swaps get their own books based on duration. 2 day and 30 day offerings entail completely different risks, including opportunity and interest rate risks, that make them incomparable, just as bonds, or options, or futures, with various expiration dates get traded separately. The time value renders them totally different instruments.

If MarginBot gets put on a repository, I'll see if I can help by merging any of my code.

lmfao, is that why there's spikes in the historical rates charts? If you paid attention to your own exchange would see money leaving the lends in droves. You've lost 10% in the past week alone. This means the next spike will only be more violent.

I have no idea what you're trying to gain by calling me greedy and a troll. Act like a damn professional and fix your problems instead of hiding from them and blaming others.

lol, mjr, do you even know what the word "liquidity" means? You demonstrate your incompetence every reply.

As the creator of an unpublished bot very similar to HowardF's, this exactly. All the market participants act independently, currently FRR acts like a "blob". The only time it will increase is during liquidity spikes, which should be minimized/eliminated. That is, the only time FRR increases is when the FRR liquidity is already consumed. By that time, there's no liquidity to tilt the average up. Interest rates could be >400% annualized, but with no volume it doesn't move the average from the millions already lent out at low rates.

You still think that the lend market is driven by supply and demand. FFS, open your eyes and use your head. I've explained before why FRR is "breaking" the lending market. You dismissed me as a "greedy lender". My whole argument has always been, and still is, when you ignore a very obvious issue in your market, you lose liquidity. Markets are never 100% efficient, you're assuming they are. By your own admission, there's a lag with withdrawing/depositing USD. For that reason alone, it's obvious why liquidity is an issue. As long as the majority of the market remains "lazy" and offering at FRR, rates will inevitably decrease. It's decreasing to the point where lenders, like me, are pulling money off. Demand has nothing to do with lend rates. When volatility is X% per day, a 0.0X% rate is nothing. What traders are increasing their volumes due to decreasing margin rates? Now what happens when BTC has a volatility spike? Margin traders click "buy" and, due to the volume, the lendbook gets obliterated. All the liquidity providers, like me? We left, because you claimed supply and demand would fix the problem.

You're a pro at demonstrating your incompetence. Please learn anything, even just the basics, of how markets, especially fixed interest ones, work.

mjr is a joke. Only response is to say lenders are greedy and want better rates. At best, it's laziness. The simple fact is, I'm pulling my money back from lending. Not because of low interest rates, but because of low interest from BFX. They would rather run from a problem than admit it. There will undoubtedly be more volatility and shortages of liquidity.

This community has put forth some great ideas. I'm looking forward to Bitfinex reacting (not really, I expect nothing more than further ignorant insulting from mjr). In the meantime, the equity markets are far more interesting. Additionally, my stock broker actually answers my emails, so I'm content giving my money to them instead. They also know something about fixed interest lending.

Wow, we've gone full swing to traders wanting outright manipulation and market fixing to protect their rates. The solution is quite simple, first, remove FRR. With the number of autolending bots, there's no need for it.

Second, put lend durations on their own books. Have, say, four lend books total, 2 day, 7 day, 14 day, and 30 day. This more accurately reflects how true fixed interest markets work. It would also prevent bid/ask from crossing. Additionally, because the lends are callable (the borrower can end the loan and return the funds at any time) borrowers can automatically take the best rate from any book they want. All the time duration risk lies on the lender and can be reflected in yield curve.

/thread

That's why we can't have good conversations. When you use language like that, you demonstrate that you have no grasp on what currency actually is.

Absolutely. Basically what happens is risk gets traded. The speculator offloads risk from the hedger. It's a change in risk:reward balance.

It's terrible for traders. Right when you hit buy to jump in on the next rally, there will be no liquidity to lend from. You end up having to pay XXX% (annualized) for a leveraged position which eats into your P/L. It amplifies the time value of your position, immensely. For example, if the market trends sideways for a little bit, you'll be paying out the ear for the time of holding an outrageously expensive loan.

It's a ticking time bomb, BFX really doesn't understand liquidity and the importance of stability in fixed income markets. Things like interest rate risk really shouldn't factor into traders' decisions.

Things will get interesting when they compete with bonds. Right now, I think it's only a combination of people who don't want to move USD from Bitfinex (awaiting BTC entry) or folks who haven't moved their money, yet. Still no word from BFX. Last I heard "they're working on a solution", lol. But we're still just greedy lenders, right? They're going to be screwed when no one will margin trade because there's no liquidity left.

lol, Oblivi has no idea how credit works in relation to financial markets. Hedging actually benefits instruments as it allow investors confidence to invest more funds. I can guarantee you I'll invest more into a married put than I will a naked position.

Care to mention competitors? I know BTC-E offers margin trading, but I think they lend out client funds without their knowledge.

BFX are great at demonstrating they have no idea how markets work. This debate isn't about guaranteeing returns to swap providers. It's about providing a fair market place that maximizes participants.


That's a solution!? Stupidly high rates are what causes margin traders to leave. It should be an appropriate and consistent rate. Right now it's a violent feast/famine cycle. What causes that? Lack of lending liquidity. When a whale clicks buy on margin, they suck up all the liquidity driving up rates to ludicrous levels for an extremely temporary time.



No. It won't. If it would "sort itself out in the end", it would be sorting itself out now. The situation's getting worse and worse everyday. BFX should be encouraging lenders for when there's actually a bull run and they'll be needed.

Please, investors are running from Japan to US. They are incomparable. Do you know what a yield curve is? If you did, you would know that all that doom and gloom you're spreading is not evident at all.

We're fighting deflation, not hyperinflation. No one's "rolling out" of USD, they're flocking to it. Also, Treasury "debt" does not work like corporate or individual debt. It works more like company shares than anything else. That is, when a country's doing good (exporting) it's currency rises in price. That's what's happening to USD. It's getting bought up and the price is skyrocketing.

I'm out of this thread. There's no logic or intelligence here. Just an anti-USD, pseudo-economist, pro gold and BTC, circlejerk.

That's if you're using derivatives for leverage. You could just as easily use them to hedge your position without selling. I'm talking about using BTC as a financial tool, which requires stability, not as a trading instrument.

And ultimately, if it causes lenders to leave, it's a bad idea. The whole point of all this is to provide a way for margin traders to borrow USD. If there's no lenders then there won't be liquidity when the borrowers need it. BFX needs to do something soon. The easiest would be to outright disable FRR, however that's a temporary solution at best.

Yeah, so what? USD is still the world's safest asset.

By the way, I don't think you understand how QE works. The Federal Reserve issued low interest short term bonds to buy back high interest long term bonds. Also, the US is anything but a weak economy. It's been 6 years since recession, get over it.

Because the miners are making enough money and there's absolutely no shortage of hashes. If the folks like me, who actually store a copy of the blockchain, saw any of the transaction fee, I might feel differently.