[BETA]Bitfinex.com first Bitcoin P2P lending platform for leverage trading

[XVacant]

Something is wrong:

About 40 min ago:
Unrealized Swap   $0.73
Now:
Unrealized Swap   -$0.40

My short position is not changed in this period.

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[unclescrooge]

Hi XVacant,

Actually it's on purpose that I disabled the cancellation of a partially filled order. I will update it in the next few days, as I can't see why we won't let users cancelled a partially filled order. Just have to check that everything run smoothly when you cancel a partially filled order.

About the swap: yes, the opened positions at the time of the migration got a bad swap update. So to be fair I reset the swap to 0 the all opened position when it was under 0. And reset yours to 0.73. The interests rates have been slightly lowered with this update to be less "crazy" (still over 14% a year for USD deposit!)

About the closing of an existing position: yep, got rolled back with the migration, sorry about that, I will correct it in the coming hours.

Other than that, thanks for testing the system. All in all I hope the process did run fine, and I hope you like the new features so far. If you have any suggestions just ask me

Raphael

[XVacant]

Hi Raphael, the swap is still minus now:
Unrealized Swap   -$0.71

[unclescrooge]

Wrong user, it's ok now

Anyway, thanks for everyone for trying the platform. Unless the swap issue, everything seemed to run smoothly, orders are executed, positions are closed as they should.

One user reported that Mtgox routing didn't work but I think this is a misunderstanding, so I will reexplain here:
-when you route your order to mtgox, bitfinex doesn't place a limit order on mtgox. It checks the mtgox orderbook and execute your order against matching order(s).


If you have any suggestion, comment on this new platform, we'd be glad to hear it. Do you like the new trading interface? Don't you like it?

Thanks
Raphael

[flower1024]

just a (very) small bug on the trading page:
 - choose limit order (you'll see a text field appearing to enter the amount)
 - press F5 (reload the page)
 - the text-field is not visible anymore (but the dropdown still says limit-order)

just switch to market-order and back to limit order to get the text-field again.

a small suggestion:
i like that you show part of the orderbook on your trading page. if you'd move the order book down it'd possible to see my positions and open orders without scrolling.



EDIT: btw very nice support. was really fast and still nice even i messed things up

[unclescrooge]

Hi Flower,

Yep, thanks for the bug report on the reload page. Will update it on the next update.

Where exactely would you see the orderbook? Under your active positions and orders? I thought it was more natural just above the ask and bid price, but as always I'm opened to suggestion.

Thanks for your words and your tests

In others news, I would like to address an issue today:
Bucket shop and margin trading

So, some of you addressed valid concern about the current hedging system for margin trading. As I said earlier, we will set up a new system for this. I'd like to explain it here to have your input. But before, I'd like to warn you about a thing: we have a security check for unbalanced position:
-if there is more than 100 BTC unbalanced position (ie total long - total short opened positions) for more than 12hours the system will automatically reduced opened position that are in profit (but you keep the profit of course) until the system is balanced again. So you don't loose anything but potential future profit. This is the only way we have for now to keep a balanced system. This has happened 2 times so far (with recent market movements, lots of short position have been closed).
This is until we set up our new margin trading system, which will be as follows:

-There will be different kind of sub-accounts (wallets). The deposit wallet will have a locked period during which you won't be able to withdraw them.
-These funds will be used to lend to users opening positions. We won't hedge position against one each others (ie, if someone opens a 100 short position, that won't open a 100 BTC long position slot anymore).
-When you will open a new position, bitfinex will tell you how much is available to open a long position and how much is available to open  short one. It will tell you the maximum period during which you can open your position (for example 7 days).
-If you open a position, you agree that after this period of 7 days (for example), if your position is still opened, it will be closed automatically at market price.
-Finally, depositors will be remunerated with an interest rate (the longer you deposit the higher the interest rate) while position will be charged with a swap.

Two things result from this system:
   -this solved totally the "bucket shop" problem: at any time the system is always balanced, whatever the users do.
   -we will need people willing to deposit money (bitcoin AND usd) without opening position.


I would like your input on this. What do you think?

Raphael

[Ichthyo]

I would like your input on this. What do you think?

For one, your recent changes and the plans outlined in your post demonstrate that you make Bitfinex more then just a "clone" of some other platform. Moreover, I welcome the direction of your changes, since they help to make the platform's operation to some degree more transparent. Obviously we can't overcome the problem that we need to trust any numbers and data you show to the users (hopefully some of the coming developments within the Bitcoin system could potentially solve that problem, but we're not there yet). But, just assumed, someone indeed trusts your numbers, then the new system makes way more clear from where the money for opening positions is drawn. Needless to say, that such a step also helps to make the whole construction more sound, financially.

There is a flip side of the coin, as always. The new system makes you (the platform) more dependent on users actually providing liquidity. A lack of liquidity will hamper trading and thus drive users away. Basically, for the user, the modification will also change the kind of risk. In the old system, there seem to be no limits, but every user bears a vague counterparty risk, due to the possibility of the platform to collapse. Now, with the proposed new system, each user on each position opened has to take an individual and more calculable risk, both for locking the money and for not being able to hold an unfortunate position "until it gets profitable again".

Personally, I largely prefer this kind of more calculable risks -- but we know there are lots of people who prefer vague risks which they can push aside. So, in the end, it will be interesting to watch if such a change will be appreciated generally.

[unclescrooge]

I would like your input on this. What do you think?

For one, your recent changes and the plans outlined in your post demonstrate that you make Bitfinex more then just a "clone" of some other platform. Moreover, I welcome the direction of your changes, since they help to make the platform's operation to some degree more transparent. Obviously we can't overcome the problem that we need to trust any numbers and data you show to the users (hopefully some of the coming developments within the Bitcoin system could potentially solve that problem, but we're not there yet). But, just assumed, someone indeed trusts your numbers, then the new system makes way more clear from where the money for opening positions is drawn. Needless to say, that such a step also helps to make the whole construction more sound, financially.

There is a flip side of the coin, as always. The new system makes you (the platform) more dependent on users actually providing liquidity. A lack of liquidity will hamper trading and thus drive users away. Basically, for the user, the modification will also change the kind of risk. In the old system, there seem to be no limits, but every user bears a vague counterparty risk, due to the possibility of the platform to collapse. Now, with the proposed new system, each user on each position opened has to take an individual and more calculable risk, both for locking the money and for not being able to hold an unfortunate position "until it gets profitable again".

Personally, I largely prefer this kind of more calculable risks -- but we know there are lots of people who prefer vague risks which they can push aside. So, in the end, it will be interesting to watch if such a change will be appreciated generally.

Hi,

Thanks for this! I know that the liquidity will be harder to fill (but it'll be our job to find depositors), but seriously, the old system is unsustainable, at least with the current unbalanced view of users (they are generally more long than short on bitcoins, who can blame them ). And you already often run into the "no reserve" problem.

So we have not many choice if we don't want to risk the bucket shop situation. In the meantime, we will take some steps to improve transparency (so you can trust the numbers we present you), after we have solved this crucial problem.

I would like to add that even if margin trading is limited, I think the exchange part of bitfinex is now very attractive for any users that want to use our site just as an exchange. We are the only exchange providing an all-in-one access to others orderbook. I mean, I could shut down the margin trading feature, I still think bitfinex would be very interesting to use.

OK back to work, have a nice day all!

Raphael

[yogi]

Using chrome browser the right hand side menu is wrapped underneath the main panel. Its a pain to have to scroll down and it looks untidy. That said I welcome a margin trading platform for bitcoin and wish you the best of luck.

[Edit] A quick fix for this is to set the minimum width property on the html page.

[unclescrooge]

Hi everyone!

As I've informed all the users yesterday, I'm happy to tell you that we will proceed to a platform update on the 5th of december, 11:00 AM GMT. As you all know, the platform is constantly improving to best serve your needs.

So here is what this is about:

-We improved the interface and corrected the html glitches that you may have (like your Yogi)
-You will find a new page, the BSI for Bitfinex Sentiment Index. What is it? It is an indicator of market sentiment on Bitfinex (bullish or bearish). While I won't into the details of how it works, it will allow you to have a glance of what the market participants feeling is like at any moment.
-We added the possibility for you to request withdrawal by Mtgox redeemable code (USD or BTC). As for all withdrawal, they are processed manually for security reason.

-But the biggest update is the new separate wallets feature: Some of you have raised some concerns about bitfinex solvency and the way it hedges users positions. We heard you, and that's what this update is about. Here is how Bitfinex will now work in regard to margin trading; Now you trade only with btc or dollars that others are willing to lend. We won't hedge positions one against each others:

-There will be now 3 different kind of wallets (sub-accounts). Each wallets will have a different purpose:
       -The trading wallet will be used for trader accounts, to the "margin trade" part of bitfinex. It will be used for margin requirements when you'll open position (you can get a margin call on this wallet while still having positive and unaffected balances on others).
       -The exchange wallet will be used for regular bitcoin exchange purpose. It will be accessible to trader and exchange accounts.
       -The deposit wallet will be used to leverage trades of "trader" accounts. It will be accessible to all types of accounts. You will have the ability to lock money in this wallet for a specific period. During this period, the money will be lend to traders. Locked deposits will earn dynamic interests rates based on the investments period, and will not be available to withdrawal. There will be an option to auto renew the investments. Locked deposit are the only funds that will be used to leverage margin trades on Bitfinex.

Here is the page that will let you move money across wallets and manage deposits:

      
       -Similarly, trading positions now have an expiration date, to reflect the availability of funds. You can close your position at any time you choose until this expiration date. At the term of the chosen period, if the position is still opened, it will be closed at market price.
    Let's take an example. Joe locks 3000 usd for 30 days on his deposit wallet. Jane then come and want to open a long position. She sees that 250 (3000 usd/ btcusd price) BTC are available to open a long position. She chooses a period of 7 days because she want to pay the lower swap possible and opens a 200 long position. One day later, she closes her position in profit , and the dollars she used will be available for others to trade.
    This is what the margin trading page looks like now:


-Finally, we have set a new fee called "computation fee". What is this? If you place an order and you then cancel it within 1 hour, you will be charged of a fee of 0.001 BTC (or USD equivalent if your default currency is USD). Why is this? To avoid spamming and using system resources without the intention to really trade.

Some questions you may have:
 -When I deposit money, in which wallet does it go?
It goes in your default wallet ("trading" for traders, "exchange" for exchange, and so on).

-The funds in exchange and trading wallet aren't used to leverage trade?
No. Only deposit funds are lend to traders. When you have 30 btc in your exchange wallet, it is safely stored with us and not used to be traded.

-Can I close my position before the expiration date?
Yes, you can close any time you want. When the expiration date has come, if the position is still active, it is closed at market price.

-How are the interests calculated?
We charge a standard rate to open positions (swap), with a discount for shorter ones. The interests earned from the swap is credited to depositors according to the investment period they have chosen.
The system will be evolving soon, with yet another awesome feature coming!

-Can I renew my open position to make it last longer?
Not yet. But this is something that you will be able to do in the future, renew your open position at a new interest rate.

-Do I have to close my position before the platform update?
You don't have to close your open position before the update. However, open positions will get an expiration period of 14 days, starting when your position was created. That means that positions older than 14 days at the time of the update (tomorrow 12/05/2012 11:00 GMT) will be closed at market price.

-What's next?
Lot of new features to come. You'll know more later

As always, I want to thank you for trying our platform, and welcome your suggestions and feedback.

You can still use our regular exchange feature, and profit from the best liquidity and the lowest fees available in the bitcoin market!

If you have any question, don't hesitate to ask here or at admin@bitfinex.com

[RyNinDaCleM]

-Finally, we have set a new fee called "computation fee". What is this? If you place an order and you then cancel it within 1 hour, you will be charged of a fee of 0.001 BTC (or USD equivalent if your default currency is USD). Why is this? To avoid spamming and using system resources without the intention to really trade.

1 hour might be too long as it seems to punish legitimate users who simply want to move their entry/exit price up/down.
There's not much point in using a margin trading platform without the leverage, so tiny spam orders really have no place here.
What about order size?

Code:

if(order_size >= 10)
       comp_fee= 0;
else{
       comp_fee= 0.001;
}

Order size limitations can be any number but probably shouldn't be less than 1BTC (ask) and perhaps $10 (bid)

[unclescrooge]

-Finally, we have set a new fee called "computation fee". What is this? If you place an order and you then cancel it within 1 hour, you will be charged of a fee of 0.001 BTC (or USD equivalent if your default currency is USD). Why is this? To avoid spamming and using system resources without the intention to really trade.

1 hour might be too long as it seems to punish legitimate users who simply want to move their entry/exit price up/down.
There's not much point in using a margin trading platform without the leverage, so tiny spam orders really have no place here.
What about order size?

Code:

if(order_size >= 10)
       comp_fee= 0;
else{
       comp_fee= 0.001;
}

Order size limitations can be any number but probably shouldn't be less than 1BTC (ask) and perhaps $10 (bid)

Hi,

One hour seems indeed too much after some think. For the moment I'll go for 5 minutes for orders less than 10 BTC and no fees for bigger order or longer valid time.

We'll monitor the stats to see if we need to adjust that in the future.

Thanks for the proposition
Raphael

[unclescrooge]

Hi guys,

So the update went smoothly, and I thank all of you that are trying the platform more and more. As I got a request by email earlier today, I think I'll explain here how margin trading is now done on bitfinex:

"When you open a margin trading order, you borrow money from depositors (even if you have money in your wallet). So there needs to be usd available from depositors (for long position). You can see if there is money available in this table (Credit available) on the margin page:


If you see 0 for long position, that means your orders won't be executed until there is money available (hence the "NO RESERVE" status. I updated the FAQ to explain that.

If you want to buy bitcoins, you can transfer money to your exchange wallets from the "Manage wallets" page (right menu), then use the "Exchange' page (link on the top menu), There you will be able to use your own money and buy bitcoins no matter what.

Why is that? Because margin trading only use borrowed money (leverage order), so you don't actually use your balance, but money from lenders."

So now, you see that we need lenders to leverage trades. People are willing to open position and pay more than 30% a year to do it! What are you waiting for? Transfer your sleeping usd on bitfinex to start earning easy money!

[guruvan]

Haven't looked in here in a bit. I definitely like the tone of the above post. Good to see you removing the bucket shop aspect from the code base you're using.

P.S. I could show you people who've gone broke taking profits (too early).

[Ploo]

Get some Bootstrap up in this bitch but make sure to use a different theme so it doesn't look like every other bitcoin site.

Like seriously, it won't take long at all and will make the website look attractive and professional.

[unclescrooge]

Haven't looked in here in a bit. I definitely like the tone of the above post. Good to see you removing the bucket shop aspect from the code base you're using.

P.S. I could show you people who've gone broke taking profits (too early).

Thanks for the words

Get some Bootstrap up in this bitch but make sure to use a different theme so it doesn't look like every other bitcoin site.

Like seriously, it won't take long at all and will make the website look attractive and professional.

That's indeed something we're thinking of, changing the look and feel for a more professional design, now that we've completed the total rewriting of the internal engine. Probably when we register the company

Which brings me to the latest update: the lending feature.

What is it?

Our lending feature goes hand to hand with the margin trading feature of Bitfinex. If you don't feel like a trader and/or prefer safer investments, this feature is for you. Bitfinex allows you, using your deposit wallets, to lend bitcoins and/or dollars to traders. You can put offers with your chosen terms (which rates, for how long, and how much). When an offer is taken by a trader, the money in your wallet will be used to buy or sell bitcoins, and a loan will be opened. When the loan expires (the trader closes his position), bitcoins are bought or sold back and money is reimbursed to your wallet.

We have set up a new lending page:


This page uses your deposit wallet. You can put your offer at your own terms (how long to lend, at which rate, how much). You see what others lenders propose. Knowing that the best rates are chosen first, you can thus put appropriate rate.

On the other hand, the traders will now so this:

Each time you open or increase a position, a new loan is made (usd for long, btc for short), with its own expiration date.

This update finalizes the total rewriting of bitfinex. Every problems that you talked about in this thread has been treated and solved. Our exchange feature is unique, our margin trading is unique in the Bitcoin world, as is our lending feature. Our security features are unique. With your help, with my partners, we've build a great and powerful tool. The only challenge ahead is Trust, and I intend to win this challenge.

Now what's next?
Soon I'll present you a transparency page, where I'll display deposit and withdrawal with their corresponding txid or bitcoin address (no username/id shown), as well as signed mtgox deposit address and some stats, so everyone can check where do the funds goes.
I'll begin to actively search for lenders, to prepare the legal registration of the company, and of course to continue improving the user experience to make bitfinex the best financial platform on the market.

Some questions about the lending feature:

Why do I need to borrow money to trade with leverage (margin trading)?

To execute a buy or a sell order, you need to have the corresponding bitcoins or US dollars. With regular exchange, you buy or sell with the funds you own. With margin trading, you have to borrow funds from lenders. The bitcoins or USD you have in your trading wallets are used to cover losses in case the market goes against, to be able to reimburse your lenders. You cannot trade with money that doesn't exist.

How are interests rates calculated?

Lenders set their own interests rates. When you open a position, the system chooses the best offers to leverage your trade.

What are the risks of this lending feature?

Not much. The exchange rate risk is for the trader. Bitfinex makes sure the trader always has enough fund in its trading wallets to cover for loss of his open position.

What is the "auto-renew offer" feature?

If this feature is set, when one of your loan expires, it will be turned into a new offer with the same parameters than this loan, so you don't have to always monitor your deposits to renew your offers.

Thanks to everyone that tries us and enjoy bitfinex!

[unclescrooge]

We need your input to set up our transparency page: https://bitcointalk.org/index.php?topic=131566.0

We want to be as transparent as possible but, because your privacy matters, we would like to know how much information we can make public.

Thanks everyone
Raphael

[yogi]

OK, I think I've found a bug.

I just checked my position and found the my long position had magically become a short position.

After thinking back I had attempted to place an order to go short at a certain price but when I clicked the 'sell' button I got a message saying 'insufficient margin', so I assumed the order was not placed as it never appeared on my active orders list.

The trade history looks like this;

2074   BTCUSD   Market   -6.0   -      about 1 hour ago   Forced executed @ 13.277(-4.03): was forced partially filled @ 13.2771(-1.97)
2073   BTCUSD   Market   -6.0   -      about 1 hour ago   Forced executed @ 13.277(-4.03): was forced partially filled @ 13.2771(-1.97)

[Edit]

Another thing, the position seems to have closed to USD, when my settings state positions should be closed to BTC.

[Edit+]

The orders that reversed my position are not shown in the Public Trades History.

[unclescrooge]

Hi everyone,

This is a bug which has two causes, and impacted 5 long users. here is what happened:

When mtgox doesn't repond to Bitfinex, I set the ticker price to be at 0 (instead of raising an error). First mistake.
This happened a few hours ago (for some reason it can happen that mtgox isn't responsive for a few minutes)
Problem is: when the control module of bitfinex saw the price at 0, it forced closed long positions (it thought it was a margin call for you)
Second problem is, the system is under heavy load tonight (lot of new users), and the same check got executed twice, opening two forced orders at the same time. Which means that instead of just having your long position closed, you may have got a short position opened.

You can see in your history log (order history) that you have 2 forced order at exactly the same time, which normally doesn't happen because the module isn't supposed to be executed at the same time twice.

Public log: Forced executed order do not appear currently on the public log, I'll update it so they are also public.

What I'm going to do: I am going to reopen your long position (with a regular order to fully hedge on mtgox). I am going to reimburse the execution fees and set the base price to be as it was before the incident.

Please allow me up to a few hours to proceed.

I would like to apologize for the inconvenience and  will of course update the code now that I know what happened.
Raphael

[yogi]

Thank you Raphael, my confidence is restored