I think one of the interesting first distinctions to make is that banks lending out money owned by other people for gain has economic benefit, is quite different to what was happening pre-GFC where low interest rates basically made it impossible for banks to make money this way, so they shifted their investments into risky derivative trades -- yes banks were playing a game of roulette with the government insuring against all losses, but yes, the government was also the root cause of the entire mess by incentivising the entire thing.

As to your question regarding fractional reserve lending, putting my personal views on fractional lending aside (these are well known to anybody who has read my dcebrief material), that decision has yet to be made. Another distinction would best be made between fractional reserve lending, and the use of funds created by fractional reserve lending to play roulette with the government acting to insure against all losses.

Another important point to consider is that most lending today is now made by non-banks -- DNotes Global would not need to engage in fractional reserve lending to compete if lending becomes an industry it chooses to compete aggressively in. DNotes Global Inc has yet to determine whether it will focus primarily just on chequing and savings accounts for the sake of a cryptocurrency onramp/offramp facilities (while likely offering small business and personal loans), or whether the company will seek to aggressively compete in home loans and big business loans etc. The latter could be difficult without significant outside investment and/or the ability for fractional reserve banking. It is also a point that banks now have liquidity requirements placed on them that non-banks aren't subject to, and the next crisis is likely to start with these non-bank entities and shadow banking liquidity squeeze. At this time I don't see a DNotes Global operated bank offering loans to customers in the medium term to the types of 'high risk' customers that would see the company in any kind of default crisis were widespread economic trouble become a thing like many of the larger banks were in 07/8.

At the end of the day, DNotes Global Inc will do whatever is necessary for the betterment of the entire DNotes ecosystem. Our future plans include crypto loans, and proving that DNotes can be a preferred option to fiat money, with economic stability and no ability for any group to fractionally create limitless new tokens one of those competitive strengths. If DNotes Global Inc had a fractional reserve lending bank, it wouldn't have any effect on the competitive advantage of the DNotes ecosystem, nor the core values of DNotes itself as a group. DNotes Global would be promoting its substitute payment network with all of its advantages (one of which is equitable money creation processes / no fractional reserve lending), which wouldn't be affected by having a fiat loan issuing bank, and neither would the fiat world notice the difference if DNotes Global opted not to go that route. The company would merely be participating in a well-established industry for the betterment of its competing substitute currency.

Ok, so I'm about to take back what I said about liking Mercatox! Wallet is STILL down, my coins are still trapped doing nothing when they could be making interest. This is getting old!

Just venting... 

How about NO fractional reserve banking at all. Just use funds the way the customer thinks they are being used. If a customer wants to tie up some funds in a loan, maybe said exchange could offer some options. A few exchanges already offer the ability to lend to margin traders at interest and that's always fun to participate in if you have some BTC you're willing to tie up for a few days. There could be some kind of interest bearing loan for a set amount of time where the user lends money to the exchange for the exchange to invest in infrastructure or whatever and the loan gets paid back in an agreed upon manner. But I don't think an exchange should ever believe that because they consistently have a certain amount of funds on their exchange at any given time, they are free to spend those funds in other ways. To be able to do that, you really need to be a bank, not an exchange, and it's arguable as to whether or not banks should even be doing that in the first place.

The way in which limit orders are processed needs to be fully disclosed. Most people assume limit orders fill in the order they were placed. That should be stated. If there's a different process, that should be disclosed as well. If there are hidden orders, that needs to be disclosed (not the individual hidden orders, but the fact that there are hidden orders), and the way to place a hidden order should be clearly explained.

Any wallet maintenance that disables any part of the wallet function (such as withdrawals, deposits, etc.) needs to be done with very regular progress updates and ETAs for going back online. And if for any reason an ETA can't be reached, then a new ETA with a good explanation for why earlier one wasn't reached needs to be posted. All that info should be accessable from each user's wallet page. That will cut down significantly on support requests so I don't see why more exchanges don't do this anyway.

State of the art security for customer funds needs to be a high priority. I believe specific security standards should be developed by IT people who understand that stuff. Related to that, there should be standards set for how many "glitches" are allowed per day or any other interval, where things aren't working as expected, and standards can be drawn up for how to minimize those issues, which are usually related to scaling. Some kind of minimal infrastructure could be a requirement to receive a certain type of rating (such as A, B, C, etc.). I think in a similar way to how there are standards and recognized procedures for how to build bridges, automobiles and airplanes, there can be those standards and procedures for how to build exchanges. Some things that you can throw together in your garage may be OK for a very small group of people but won't hold up when your user base grows beyond a couple thousand users.

All fees need to be clearly disclosed both ahead of time and as transactions are being set up.

A really nice feature BitTrex has is the ability to go straight to a coin's wallet from the market page so you can make a deposit of that coin without leaving the market page. Another feature I like in BitTrex is having a coin hyperlinked to its market so you can go directly to the desired market from your wallet.

Thorough transaction records need to be kept and made accessible to users via export and API at any time (with maximum allowed "outage" periods). Trading records need to include what coin was bought, what coin was sold, and how much of each, time stamp of trade, and what fees were paid in what currency.

Full disclosure on procedures for customers reclaiming funds in the event of a hack. I would like to log in to an exchange and be able to know ahead of time how the exchange will handle the return of my funds if despite all security measures, funds get stolen. The main reason is that the better prepared to handle an event such as a hack resulting in loss of funds, the less likely such an event is to happen.


I'm sure I can think of more...

I think I got my wallet working properly. I moved it to a new computer and in the process downloaded the entire block chain. It's been working as expected ever since. So I'm thinking somewhere along the line my original block chain got corrupted and kept kicking me off into lala land. My "new" wallet actually has a smaller balance than my previous wallet because apparently more of the minting instances than I'd realized were not real

Ticket sent. Hopefully tomorrow...

Mercatox wallet still unavailable for withdrawals. How long do these wallet updates usually take?