Bitcoin Forum

https://i.imgur.com/KtzJvBf.png
Everything I've learned has told me that offers of double-digit annual returns with low risk is a sign of either delusional overconfidence or a ponzi operation.

Are people really paying over 50% APR to buy bitcoins on margin? Is there any way for me to verify this, without risking my money by depositing it at your exchange and trying for myself?

then dont ask BFX ask other depositors LOL

you know logic  and stuff

If the other depositors weren't getting their money I think I'd have heard about it by now. But even that PirateAt40 guy was able to make his payments for a while before vanishing with everyone's cash. Just because people are getting their interest today, doesn't mean that interest is backed by anything real.

But I guess you have a point - I can verify how real this rate is by finding out what people are paying in interest for their BFX leveraged longs and shorts.

Hey you! If you're reading this, and you're going long or short on leverage on Bitfinex... what are they charging you for interest?

Hopefully longs are paying more than 50% APR, and shorts more than 10% APR. If so, then I can believe that depositors are getting those interest rates from actual business (and not imaginary ponzi business).

I personally took the record loan USD of 1400% APY
the platform wide record was 9001% APY for USD loans


also here a image with some rates i took and the current credit market

https://i.imgur.com/v5CzrBJ.jpg

why did you change the thread title lol ?

link that you  can check (do need a account)

https://bitfinex.com/pages/stats

https://community.bitfinex.com/showwiki.php?title=Bitfinex+Documentation:Lending

https://community.bitfinex.com/showthread.php/67-Variable-Interest-Rate

Your first post, you said I should ask other users. So I changed the thread title so that other users might look in the thread.

Anyway, thanks for the info. I'm much less worried about this than I was on Friday.

Bitfinex provides a lending/trading market, the current rates of interest for USD is high because traders are desperate to borrow USD. When the current bitcoin rally ends the lending rates of USD will go down. I am currently long, but I set my position before the rate increased and borrowed at 18%.

Why don't you just register a trading account and check out for yourself?

I'm about 95% sure Bitfinex is not a ponzi. I am lending a considerable amount of money there. Here's my reasoning:

1. Interest rates move up and down along with lending volume. When no one wants loans, the interset rates drop. When BTC rallies, loan volume shoots up, all available lending offers are used up by BTC traders and interest rates spike.

2. There are other humans competing against me to lend. If I set a rate at 55%, in 5 or 6 minutes some bugger will come along and ask 54.9%. Either they have an AI-type software that is programmed to compete against lenders or there is a real human on the other end trying to undercut my lending offers.

3. The site operator accepts deposits by wire transfer. If this was a ponzi and he disappeared, I could take legal action against him and I would have proof of sending him real money (not just play money, i.e. BTC).

4. It makes sense to pay 100%+ per year to buy bitcoin if the price is rallying. It makes sense to pay 0.3% per day when bitcoin is going up 10-20% daily. Bitfinex lets you borrow at 5:1, so even a 1% upward price move gains you 5%. With a 0.3% daily cost, you can still make money. So, I don't think traders are acting irrationally by paying these margin rates (as long as the bull market continues).

So, all these factors have convinced me the site is real. For me the risks for bitfinex are the following:

1. The site grows so big with so many deposits it gets tempting for Raphael to run off with all the money.
2. Theft and/or hacking either internally or externally.
3. Raphael disappears and no one can process withdrawals.

Bitfinex is still in beta and so far the people running the service seem interested in running an honest and legitimate service. Let's hope that continues for the long-term.

jajajaj el puto amo XD poniendo un numero a una cosa tan relativa como confianza  :D :D

Jajajaja, sí yo siempre pongo un número a todo. :-)

a small update for OP
https://i.imgur.com/bof5nYM.jpg

This is crazy! I had to pay 225.6% interest PER DAY!! on my loan. Guess how long I had that position open?
10 minutes before the swap interest rates ate it up (while price was rising 1% above base price in a 5:1 leveraged long position --> I should have had unrealized profits instead of a forced liquidation)

http://i47.tinypic.com/2l9gqpi.png

What bugs me most is that interest rates are actually wrongly displayed: See how it says 0.28%/day and 0.17%/day ? Instead when the position was opened I was hooked to a ludicrous 225.6%/day loan.

Sorry Bitfinex, but I wont risk anything then playmoney on your service until you restore my trust in it.

@Spekulatius click on lending page and post again, it looks like you have no idea what are you are doing, before pointing with your little finger make some checks :P, it look like you did took a VIR loan and the variable interest rate does that, varies based on demand that's why you need to click on lending page

another thing the "your indicative rate" is only relevant if you open a new position for maximum 60 days now not for the past loans, so in your picture you are comparing past loans rate with current available rates



to anyone that read this
go and read this https://community.bitfinex.com/forumdisplay.php/15-Official-Bitfinex-Documentation
and this https://community.bitfinex.com/forumdisplay.php/6-Wiki
and also this https://community.bitfinex.com/showwiki.php?title=Loans

Variable interest rates that eat up any margin balance within minutes should be prohibited! Its a clear rip off that no trader could possibly want to choose.


When I made the order to go long yesterday or so, the displayed rates were around the same and by no means 225.6% per day!


to anyone that read this
go and read this https://community.bitfinex.com/forumdisplay.php/15-Official-Bitfinex-Documentation
and this https://community.bitfinex.com/forumdisplay.php/6-Wiki
and also this https://community.bitfinex.com/showwiki.php?title=Loans

[/quote]

you can see above that is what the market wanted users post this demand for their USD Bitfinex does not lend you USD is all user based, the free market set the VIR and all that



go to https://bitfinex.com/offers/ and if you see something like Executed at vir(XXXXX) it means you took a VIR loan. iirc the last offer was for 88888% APY and some ppl did took it

@225.6% IR per day if is much or not

225/24= 9.375 that means 9.375% per hour

let look at hourly chart

https://i.imgur.com/EdojFFf.png


and iirc interest is charged per hour so even if you have the loan 1h and 30 min you pay the interest only for the first 1h (i dont know if Raphael changed that or not)

I don't think the VIR has ever been at 200% per day. The highest I have seen is 300% per year (and that's when BTC is rallying big time). I think that must be a bug.

hello Spekulatius,

I did answer you by email, but to keep other informed: the way Variable Interests rates were calculated made it very sensible to a few very high rate loans. So as I said here (https://bitcointalk.org/index.php?topic=119745.msg1538998#msg1538998) a few hours ago, we have introduced a time factor for the Variable Rate calculation: VIR rate is calculated not only on open loans but also on past loans. This is already in action.

This is still a free market of lending rate, but with a retroactive loop to control the rate (or how past market participants will influence current market conditions :p); it will smooth the variations of VIR and avoid what happened last night. If you take a VIR loan, you have to be sure it won't ruin you 1 hour later.

Best regards
Raphael

It did, during a few moments, because of a loan at 88 888% a year taken, and because most of the loans were in VIR and at this time VIR loans didn't influence the total VIR (which can seem logical but allow for enormous rate volatility).


By the way, since I'm here: no it's not a ponzi, you have a live example of why not, and no I won't go anywhere with your money. My proud will be a long lasting and profitable service :)

Cheers
Raphael

I see. Even if you are using a dollar weighted average, with no limit on interest rates, you can create strange situations. Let's look at an example:

$50,000 lent total.
$49500 lent at 60% per year.
$500 lent at 88,888% per year.

Dollar weighted average: 948.28%

So, even a small 1% loan at a high interest rate can modify the average by more than 10x. There is possibility for market manipulation here.

You might want to find the standard deviation and throw out all the outliers. So, you could calculate only using a 95% interval. You throw out the top 2.5% and bottom 2.5% loan volume and calculate the average using the remaining 95% loan volume. At a current $50,000 loan volume that would require someone to borrow more than $1250 at a crazy high or crazy low rate in order to affect the market.

if a large portion of that 50 000 are VIR then yes


https://community.bitfinex.com/showthread.php/101-But-what-if-anyone-manipulate-the-VIR-making-a-loan-1000-USD-at-9999-APY check that and why wont work on the long run

Raphael just sent me an email:

TLDR: He excused for the inconveniences caused and offered to reimburse me (just 3 USD anyway but a friendly turn nonetheless). He also promised to put into action some tweaks to make such erratic changes to the VIR impossible.

A silly situation is he can create two accounts and lend to himself, of course there is large fee to pay then but theoretically the gain could still outrun the loss, if properly designed.

Another advice is to allow users to set their threshold rate, whether they're opting for VIR or not.

it has more to do with the speed reaction from market participants, if the market participants dont react then yes that cold give quite some money and on that case is trading darwinism