New peer-to-peer lending on Bitfinex

[unclescrooge]

Hello,

I'd like to present the latest addition to the margin trade feature on Bitfinex. It's works as a peer-to-peer lending, where borrowers use their loans to margin trade.

It'll give traders the ability to load margin in advance. Why? because you may want to have margin available without immediately opening a leveraged position.

Here is our new lending page:


If you have a "Trader" account, you will see the new "Loan" button, that will allow you to post a loan offer. If you're a lender, you'll see only the lending part.
There is now a new parameter for offers: the "Type". "Market" offers are filled with whatever offers is found (be careful when you use it, you don't want to lend 1000 bitcoins at 0% a year for 60 days). "Limit" offers are filled with your set rate or better.

A new table has been added, for traders, displaying the active loans.

On the sidebar, you will see the maximum size of the position you can open with your loans:


When you open a position, if you open more than what you have in loans, the active offers of the current credit book will be used (the current system of margin trading still works as is in other words).

Questions:
Q/How much can I loan?
A/You can loan your tradable balance in USD or BTC; Your maximum loan size is equal to your leverage multiplied by your trading wallet total balance (USD or BTC).

Q/How are interests charged?
A/Interests are charged every day from your trading wallet, from the moment a loan is opened and until this(these) loan(s) are used for trading (they are then converted into regular position credits). Then, interests will be charged as regular swap (as they are now).

Q/What changes for lenders?
A/ Lenders will have a better view of the current demand. They will be able to more easily fill the offers.

If you have any more questions, don't hesitate to come back to us. We hope you enjoy Bitfinex!

Raphael NICOLLE
Bitfinex team
https://www.bitfinex.com

[1715600471]

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[1715600471]

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[1715600471]

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[myself]

  BUY vs SELL

A sample for the BTC market on the left the demand on the other side the offers

[novusordo]

What happens if a buyer doesn't pay back a loan?

[myself]

What happens if a buyer doesn't pay back a loan?

he don't have that option

[novusordo]

What happens if a buyer doesn't pay back a loan?

he don't have that option

Mind explaining why not?

[myself]

What happens if a buyer doesn't pay back a loan?

he don't have that option

Mind explaining why not?

https://bitfinex.com/pages/howitworks

For example, let's say you want to open a long position for 100 bitcoins. That means you want to buy 100 bitcoins hoping to the price will go up. The system will borrow for you 100 * the bitcoin price US dollars (let's say 1300 USD) from lenders, at the best rates available. Your position will have a maximum period (defined by lenders), after which you will have to reimburse the 1300 USD (close the position). Each hour you will be charged an interests rate going to your(s) lender(s). If later you want to increase your position, you can borrow more funds, which will have there own maximum period.
At any time before the expiration date, you can close your position. This will reimburse your lender, and you will keep the profit.

Our lending feature goes hand to hand with the margin trading feature described above. 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.

You don't have the exchange risk when you lend with bitfinex. The exchange risk is taken on by the trader, and, in case his position loses money, he will cover the loss with funds in his trading wallet. If by any chances losses are greater than what the trader can afford, the loss is on Bitfinex, we will cover for the missing amount.
You can then see how the risks are minimal, while the rates are great (bitcoins price being very volatile, traders can afford to borrow at a high premium)

[novusordo]

Explains how it works

Thanks! Glad I understand that now.