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

[mjr]

Not sure about Bitstamp, when I read that story, I didn't even think about that, because it has been so long since we really did much over there. I will get back to you, but I don't believe that it has any effect on us.

Good to hear, but can some sort of official confirmation there be prioritised?

All I've seen is some deliberately-vague Reddit posts from Raphael (from some time ago) talking about how you used to have a reasonable quantity of funds on Bitstamp to implement mirroring their orderbook onto 'Finex (effectively arbitrage between the two to add some depth to the books here), and that they were intending to "reduce" the amount of that they did.

That was offered as an explanation for the price on Stamp and Finex starting to diverge and when someone asked for details of how that reduction was going to happen they were turned down with words to the effect of "I can't tell you that". I'd been assuming that, with that link severed, you would have no need to keep funds with a 3rd party and would have withdrawn them out since then, but it would be calming to hear it officially and definitively.

As for FRR...

Then the liquidity provider can plan for this by simply putting out an offer at a much higher rate. Once the lower rate offers exit en mass (why they currently have offers that aren't filled, and are content to leave those offers on the books...its not my theory, I don't know) you are now at the top of the book. Congrats, you are now receiving the returns that you think are appropriate.

Became tired of the effort of manually placing offers for the current returns, placed high offers to wait for better rates... so I guess I'll be able to report back soon eventually, as to whether this strategy pays off.

Yeah, this question has been popping up today. I was surprised because I didn't realize people still thought we had funds there. Their issues had no affect on us. We had (past tense) maintained a safety valve, in order to allow more liquidity when our books were thinner. This was quite some time ago, and was a remnant of the time when we offered routing of orders to Bitstamp. That is no longer the case, and we had quietly discontinued that as our volume and our books grew much larger than theirs. In any case, it hasn't affected us at all. We basically offloaded that functionality to market makers who arb the different exchanges books. Once we became big enough, with a deep enough book, there was really no reason for us to have to deal with that anymore.

Yeah, I personally am taking another look at the BTC swap market now...but then you also are long BTC in a bear market...I don't really like trying to predict market moves. I hope your strategy pays off, I think it probably has a lot to do with the overall demand for going long on margin, which I imagine has dried up a little bit as the bulls have gotten burned maybe once too many times now.

[noggin-scratcher]

I didn't realize people still thought we had funds there.
...
we had quietly discontinued that

If you're going to do things "quietly", don't be too surprised when those of us on the outside don't know for sure what the situation is 

[mjr]

So, lets talk about the FRR stuff (again).

So, if the FRR is broken, and with an increase in demand, the rates responded and now the FRR for BTC is twice that of the FRR for USD. That is exactly what I would have expected to happen, with or without FRR. Oh, a lot of people want to short, the rates for shorting went up. I think that the FRR probably acts as a counterbalance against large swings, dampening effect either way, but with autolending bots all over the place, I really think it is completely backwards to want to get rid of it. You are literally asking for the people who are not managing their funds, content to sit on the sideline, to be forced to jump into the market. In other words, those people are NOT competing, and it is preferable for them to start competing. I don't see how that would possibly help people who want rates to go up. All of a sudden, they have to pick their own rates, and don't really care that much, as evidenced by the fact they use the FRR...so they should download any marginbot, set it to "as long as i get something", and that would get rid of the downward pressure? I understand you don't like FRR, but how do you account for ALL the offers IN FRONT of the FRR...those people are CHOOSING a lower rate. If you pick whatever rate you like, I don't think that most people are going to say, oh, well if his rate isn't the FRR then I don't want to beat it...anyway, coming from the perspective of someone who doesn't care at all what the rate is, I don't see how that is better. I think the fact that the rates have risen, basically shows, definitively, that with enough demand to overtake the supply, the FRR won't stop rates from rising. The rates can rise, if demand is high enough, as demand for longs sagged, they just weren't enough to raise the USD rate...the USD rate would have fallen either way.  I'm not sure why rates dropped (have to look into that), but in the short term, yes, rates are erratic, over the longer term, they make more sense.

So, I'll keep this short, since the rates are too low for me to find interest in discussing margin lending anymore, but you did specifically mention MarginBot, so I'll respond.

If everyone who was currently using FRR switched to a bot, I can pretty much guarantee rates would be more responsive, and in all likelihood, higher, for a couple of reasons.

1) Minimum rates - you can't set this with FRR.  You claim people are happy to take what they can, and to some extent that's true, but part of this is because they CAN'T choose the minimum they'll take with FRR...  This option alone would have a HUGE effect on rates, even if people literally installed the bot, added their API Key and walked away, the rates would be floating closer to .065% (default minimum).  One way or the other, this would at least make people spend just a few seconds thinking about what they're willing to take.
2) Spread Lending - right now all the money going to FRR is one big ass lump.  Spread it out, and the "wall effect" would go away, or at least be reduced.  Each upward step would have a smaller wall to climb, small runs would still move us up, not sideways.
3) Reactive lending - loan targets would be constantly moving, looking for new targets every few minutes, instead of every hour.  Rates would adapt quicker.

I could go into detail on lots of other, far more complex reasons as well, but honestly, I'm not particularly interested in this discussion.  I never was, but somehow got sucked in.  FRR is broken.  You talk about wanting a free market, but then manipulate the hell out of it with the FRR.  Honestly, have you ever seen a financial market anywhere else in the world with an auto-averaging system like this?

Yeah, I am not really interested in it either. We all agree that the FRR can be improved, and we have some possible implementations that I am waiting on. I think that as far as minimums, there is a minimum with the FRR, 0. You can't set it, but if you want to set a minimum, you can by simply not using the FRR. In other words, people who use the FRR are indirectly expressing that anything over 0 is acceptable. If that wasn't acceptable to them, they would not be using the FRR. It is perfectly possible to recreate the FRR using a margin bot...it just happens to be offered via the platform at this time.

Either way, I understand your point of view. I don't agree that it is manipulative, but we can agree to disagree. I do agree that if more people switched to using a lending bot, the things you mentioned would be the case (I don't think rates would rise). That is the key though, every one of those people could use a bot today. They aren't. So, if they have the ability to set a minimum acceptable rate (either using a lending bot, or via fixed rate offers) and yet choose not to, it signifies to me that they have no interest in expending effort on trying to maximize their returns, and that they will go with whatever strategy gets them 'something' for the least amount of effort, in other words, fill me at whatever rate is available.

I have seen some markets which offer execution strategies that implement algorithms, not exactly the same, but then again, I know of no market that also allows the margin to be provided in a p2p manner. So kind of uncharted territory...

Either way, I really respect the contributions you have made to the discussion, and your code. Thanks for being a part of the community, and thanks for using Bitfinex.

[mjr]

I didn't realize people still thought we had funds there.
...
we had quietly discontinued that

If you're going to do things "quietly", don't be too surprised when those of us on the outside don't know for sure what the situation is 

Good point. We try to avoid directly saying anything about other exchanges. We are happy with what we are offering, and its fine that others offer what they think the market wants. I'm sure there are some niches we aren't filling, and that is ok. I think Bitfinex has come a long way, and that system was probably invaluable to us getting where we are today. We outgrew it, and it is unfortunate that other people are having some issues. I honestly want bitcoin to succeed, and I am really tired of the constant hacking, etc. I don't wish that on anybody, and I think it harms the ecosystem in the short term, and the reputation of bitcoin in general. So, we are not all rejoicing at the news that some people have issues, and really didn't want to draw attention to that. I, personally, really like a good competition, but I don't think anyone should root for the opposing team's quarterback to get paralyzed...

Anyway, we weren't affected at all, we haven't had much interaction directly in quite a while, and we hope that things work out.

[HowardF]

In other words, people who use the FRR are indirectly expressing that anything over 0 is acceptable. If that wasn't acceptable to them, they would not be using the FRR.

This logic is flawed.  They don't necessarily accept that the minimum is 0, they just want a reactive rate that doesn't require babysitting, and this is their only choice on bitfinex.  Most people use FRR hoping to catch uptrends (not realizing the FRR is terrible at reacting to uptrends).   If given the option to set a minimum, they almost all certainly would (there may be some who would set it to 0%, but not many.)

I also don't understand the resistance to this idea... Its easy to code, and adds a new feature that I'm sure people would appreciate. Default it to 0.0% if you think its manipulative (though I'd say that would be stupid because a 0% loan shouldn't ever go out anyways).  I'd also mention that it is a feature your competitor has.

(I will say I doubt this will have a huge effect on rates, since it wasn't in on day 1 and too many people already have their cash in FRR on set it and forget it mode, but I do think it would be a nice feature for people, and would at least get new users thinking about what they're willing to take, and maybe get them to understand FRR may go WAY BELOW what they actually are willing to accept.  My guess is most of the old money in FRR was from people who never put a second of thought into the rates maybe going this low.)

[MustMan]

For Bitfinex, FRR already became a Religious persist......

[Mythoughts]

1) Minimum rates - you can't set this with FRR.  You claim people are happy to take what they can, and to some extent that's true, but part of this is because they CAN'T choose the minimum they'll take with FRR...  This option alone would have a HUGE effect on rates (...)

I like that idea.

Arguably a good improvement with absolutely no downside for anyone.
Super-easy to implement, just add a new box "minimum acceptable rate" or something similar, can even be checked client-side with simple javascript code. Allow "0" for the lenders which will take anything, according to mjr. But provide no default value and require the box to be filled, so that whatever they enter is a conscious decision.
Only re-offer their BTC or USD if the FRR > their minimum rate. Sit on the sidelines if not, and maybe check once an hour if the FRR raised to an acceptable level and re-offer then.

Exactly, if you have a default rate, you just move the wall to whatever that default rate is.
(...)

I thank you for your long response, but I believe there's a misconception about what you think I tried to say? I just wanted to express that I like HowardF's idea how to easily make the current FRR a little bit better without changing much.

There's no default rate in my post, so I'm unsure what you're trying to explain to me here. Nor is it about getting the rates higher.
Just a way to improve the current system with a slight, very easy to implement change that benefits everyone (or, if you disagree with that, has at least no downsides).

[noggin-scratcher]

Is it time for another wild-ass theory about FRR? Because here's one: it's not anything inherently wrong with having an algorithmically determined auto-rate; the problem is having $2.5M of money that's being unintelligently managed. Sure, a person theoretically could sit down and decide to make the same choices as FRR, and a thousand individuals could theoretically all decide to make the exact same choices in synchrony... but in practice they wouldn't, and if they did we would not think highly of those choices as sensible strategy.

Seriously - imagine sitting down with someone over lunch and having them tell you "So I have $2.5M I want to lend out, so what I did was put it all in one colossal offer set at a rate too high for anyone to want to take, then slowly and incrementally reduced the rate on offer with limited regard for fluctuations in demand. But it's the damnedest thing, even now that the rate I'm offering is really low, other people still keep slipping in and undercutting me... guess I'll just have to keep slowly and incrementally reducing the rate on offer some more."

...then imagine that they add to this description a caveat that "This one time there was a massive rush of demand that took everything I was offering along with every other offer on the book, so as soon as I had some more spare money I put it straight back in at almost exactly the same low rate I was offering before".

I'd for one would be telling them to stop being an idiot and start breaking that pile up into multiple tranches offered across a range of rates, and to pay far closer attention to what rates are being taken around them. The "markets are so awesome and efficient" part of economic thinking relies on participants being rational actors; doesn't necessarily hold true if they act dumb, but the current setup on 'finex is that your choices are constrained to either allow an algorithm to play dumb with your money, or spend a reasonably significant amount of effort on either manually offering or setting up a bot.

[bricky]

I am looking into perhaps setting up a simulation/testnet environment, where perhaps some people could test it out, etc. No promises yet, but it is an idea I am throwing around. I know that a lot of people here have been with us since the beginning, and I really want to hopefully reward your patience, and show you guys what we have been working on. I know that things aren't perfect, I know that there are a lot of people who don't have things just the way they would prefer. I am sorry about that. We are working really hard, doing our best, to make the best exchange for bitcoin in the world. 2015 is going to be a great year, I hope. If you have more questions, feel free...

... I, for one, would be really really interested in that!



I know you mentioned elsewhere that there'll be no changes to the api, but I can't see a backend swapout going through without a few unexpected quirks slipping in (e.g. things like the sign difference betweed order/new and order/new/multi), so I'd really appreciate the opportunity to test against the new backend before it goes into place.

Edit: props for your work here btw, and especially for your patience

[Sukrim]

Seriously - imagine sitting down with someone over lunch and having them tell you "So I have $2.5M I want to lend out, so what I did was put it all in one colossal offer set at a rate too high for anyone to want to take, then slowly and incrementally reduced the rate on offer with limited regard for fluctuations in demand. But it's the damnedest thing, even now that the rate I'm offering is really low, other people still keep slipping in and undercutting me... guess I'll just have to keep slowly and incrementally reducing the rate on offer some more."

Guess what, this concept exists as http://en.wikipedia.org/wiki/Dutch_auction for a long time already.

If the strategy of having everything in one wall is an optimal one is up to discussion. In the end FRR is the only rate where you can get higher returns after the market for funds goes up. Maybe it'll get less and less attractive over time, now that there are undercutting bots around that try to sneak in more fixed rate loans - if the return from the few spikes where rates go up a lot is worth getting 0 for the money you have wound up in open offers remains to be seen - I personally am relatively sceptic about that, at least the default MarginBot algorithm seems to perform very similar to 30 day autolend FRR while adding more work on your end.

[Barabbas0]

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.

That is a perfect response. If you can find a better use of your funds, that is how you "vote" on the rate on the swap market. If enough people feel the way you do, there will be a lack of supply and the rates will rise. If they get attractive enough, perhaps you will offer swaps again. Either way, good for you for making decisions about how you want to use your money, that is the free market in action!

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.

[HowardF]

If the strategy of having everything in one wall is an optimal one is up to discussion. In the end FRR is the only rate where you can get higher returns after the market for funds goes up. Maybe it'll get less and less attractive over time, now that there are undercutting bots around that try to sneak in more fixed rate loans - if the return from the few spikes where rates go up a lot is worth getting 0 for the money you have wound up in open offers remains to be seen - I personally am relatively sceptic about that, at least the default MarginBot algorithm seems to perform very similar to 30 day autolend FRR while adding more work on your end.

I can pretty much promise MarginBot's returns will be MUCH better then FRR when there are big flash runs.  It will catch those runs with significant portions of your money, and lend out at or near the top, while FRR will still be lending at a low average.  The problem is we don't have many runs like that, because the market is crap, and there's to much money available for margin.  If we're lucky we get one good run every 2 months.

(from my results by the way, I'm also fairly sure MarginBot is currently beating FRR by quite a bit in returns, and it doesn't take any effort to maintain at all.  10 minutes to set up, then it'll run all on its own for years and years.  I log into it maybe once a week, just to check my returns charts.)

[Barabbas0]

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.

[mjr]

1) Minimum rates - you can't set this with FRR.  You claim people are happy to take what they can, and to some extent that's true, but part of this is because they CAN'T choose the minimum they'll take with FRR...  This option alone would have a HUGE effect on rates (...)

I like that idea.

Arguably a good improvement with absolutely no downside for anyone.
Super-easy to implement, just add a new box "minimum acceptable rate" or something similar, can even be checked client-side with simple javascript code. Allow "0" for the lenders which will take anything, according to mjr. But provide no default value and require the box to be filled, so that whatever they enter is a conscious decision.
Only re-offer their BTC or USD if the FRR > their minimum rate. Sit on the sidelines if not, and maybe check once an hour if the FRR raised to an acceptable level and re-offer then.

Exactly, if you have a default rate, you just move the wall to whatever that default rate is.
(...)

I thank you for your long response, but I believe there's a misconception about what you think I tried to say? I just wanted to express that I like HowardF's idea how to easily make the current FRR a little bit better without changing much.

There's no default rate in my post, so I'm unsure what you're trying to explain to me here. Nor is it about getting the rates higher.
Just a way to improve the current system with a slight, very easy to implement change that benefits everyone (or, if you disagree with that, has at least no downsides).

Howard had a suggestion for a minimum rate, I saw that you didn't. I was trying to basically respond to both. Yes, I personally always was a fan of allowing people to set a delta on the FRR, so you could say "Put out an offer at the FRR+.1%" meaning that you would get a better return than the FRR, IF the FRR gets taken. If you wanted to accept less, but have higher priority, you could put a negative value.

One quick note, whenever I refer to a minimum rate of 0, it is more like a limit in calculus than a number that I think would actually be used. People who will take anything, won't actually take NOTHING, but they would take anything as it approaches the limit.

[mjr]

Is it time for another wild-ass theory about FRR? Because here's one: it's not anything inherently wrong with having an algorithmically determined auto-rate; the problem is having $2.5M of money that's being unintelligently managed. Sure, a person theoretically could sit down and decide to make the same choices as FRR, and a thousand individuals could theoretically all decide to make the exact same choices in synchrony... but in practice they wouldn't, and if they did we would not think highly of those choices as sensible strategy.

Seriously - imagine sitting down with someone over lunch and having them tell you "So I have $2.5M I want to lend out, so what I did was put it all in one colossal offer set at a rate too high for anyone to want to take, then slowly and incrementally reduced the rate on offer with limited regard for fluctuations in demand. But it's the damnedest thing, even now that the rate I'm offering is really low, other people still keep slipping in and undercutting me... guess I'll just have to keep slowly and incrementally reducing the rate on offer some more."

...then imagine that they add to this description a caveat that "This one time there was a massive rush of demand that took everything I was offering along with every other offer on the book, so as soon as I had some more spare money I put it straight back in at almost exactly the same low rate I was offering before".

I'd for one would be telling them to stop being an idiot and start breaking that pile up into multiple tranches offered across a range of rates, and to pay far closer attention to what rates are being taken around them. The "markets are so awesome and efficient" part of economic thinking relies on participants being rational actors; doesn't necessarily hold true if they act dumb, but the current setup on 'finex is that your choices are constrained to either allow an algorithm to play dumb with your money, or spend a reasonably significant amount of effort on either manually offering or setting up a bot.

So tell all the people CHOOSING to use the FRR "Stop being an idiot and start breaking that pile up into multiple tranches". You are conflating Bitfinex, the person offering this option, with the multiple people who are offering funds. We are not offering funds, those users are. If they CHOOSE to use the FRR, then it seems like a choice that they want to make (at least it is their expressed intent, if not their stated preference).

[mjr]

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.

That is a perfect response. If you can find a better use of your funds, that is how you "vote" on the rate on the swap market. If enough people feel the way you do, there will be a lack of supply and the rates will rise. If they get attractive enough, perhaps you will offer swaps again. Either way, good for you for making decisions about how you want to use your money, that is the free market in action!

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.

"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." OK, and "why is that a problem?", is my question...

We do not care if the rates drop, or if people pull their funds, there are more funds chasing the limited trading than needed right now...which is why rates are low. Right now there is NO issue with liquidity.

"As long as the majority of the market remains "lazy" and offering at FRR, rates will inevitably decrease."

As long as tons of people keep offering their funds, there won't be funds available...that sum up the argument? Those people don't seem to care if the rate decreases. If they wanted better rates, they would start using HowardF's bot. There are currently around 2.5 million at the FRR, last I checked.

The main isssue, is that because YOU think they are making a stupid choice, you think that you should change their choice. Basically, like a competitor that offers a loss leader, in order to drum up volume, you as the person who wants to charge a premium have an interest in them ceasing that activity. I am not dismissing you as a greedy "lender". I am saying that you are free to offer or not offer your funds at whatever rate you feel is appropriate, everyone else is also able to do that. It seems like a lot of people chose to just accept the average of all fixed rate swaps over the last hour, that is the number they chose by using the FRR. You don't like that number, so you don't have to choose it. They are free to choose that number if they like though. I'm sorry you don't agree with THEIR choices.

[mjr]

If the strategy of having everything in one wall is an optimal one is up to discussion. In the end FRR is the only rate where you can get higher returns after the market for funds goes up. Maybe it'll get less and less attractive over time, now that there are undercutting bots around that try to sneak in more fixed rate loans - if the return from the few spikes where rates go up a lot is worth getting 0 for the money you have wound up in open offers remains to be seen - I personally am relatively sceptic about that, at least the default MarginBot algorithm seems to perform very similar to 30 day autolend FRR while adding more work on your end.

I can pretty much promise MarginBot's returns will be MUCH better then FRR when there are big flash runs.  It will catch those runs with significant portions of your money, and lend out at or near the top, while FRR will still be lending at a low average.  The problem is we don't have many runs like that, because the market is crap, and there's to much money available for margin.  If we're lucky we get one good run every 2 months.

(from my results by the way, I'm also fairly sure MarginBot is currently beating FRR by quite a bit in returns, and it doesn't take any effort to maintain at all.  10 minutes to set up, then it'll run all on its own for years and years.  I log into it maybe once a week, just to check my returns charts.)

I have no doubt that MarginBot will beat the pants off of the FRR. It is designed to do that. You yourself have shown that it is EASY to set up, it generates more returns, and requires very little work. IF the users cared enough to research other options, then it seems like a no brainer to switch to using your margin bot. They don't seem to care enough...judging by the funds sitting at the FRR.

As I have said in the past, if everyone were to cease using FRR and switch to your bot, there would be more competition for returns, because that 75% of the available funds being offered would now actually be trying to get filled. That is how MarginBot gets better returns, by trying to keep your funds actually being used. It seems like a LOT of the people using the FRR are not getting any returns right now, because there is quite a bit of supply in front of them.

Long story short, your marginbot is available to anyone who wants to use it, probably offers better returns than FRR, can be "set and forget", and yet FRR remains a large portion of available margin. I think that a cursory search, maybe 15 minutes of research and thought would lead me to switch over to your bot, and it seems like a large portion of people offering swaps haven't put in that 15 minutes...

By the way, I believe that you said the default minimum for your bot is .065%? I couldn't find the post where you mentioned it. What would happen if everyone used your bot and left the default value on? A wall? What would happen next? Would people start placing offers in front of that wall? Would we still arrive at exactly where we are now? I think so...

It is funny, because "efficiency" means lower rates, and people argue that the FRR is not efficient. It is playing dumb with your funds. So, people seem to want someone who will compete harder with them. Someone who is really smart trying to beat them to offering a swap. This is what I don't understand. In no area would I prefer to have tougher competition if my goal is to maximize my success. I might hope for that if I enjoy the competition, but not if my goal is to maximize my success.

[mjr]

I am looking into perhaps setting up a simulation/testnet environment, where perhaps some people could test it out, etc. No promises yet, but it is an idea I am throwing around. I know that a lot of people here have been with us since the beginning, and I really want to hopefully reward your patience, and show you guys what we have been working on. I know that things aren't perfect, I know that there are a lot of people who don't have things just the way they would prefer. I am sorry about that. We are working really hard, doing our best, to make the best exchange for bitcoin in the world. 2015 is going to be a great year, I hope. If you have more questions, feel free...

... I, for one, would be really really interested in that!



I know you mentioned elsewhere that there'll be no changes to the api, but I can't see a backend swapout going through without a few unexpected quirks slipping in (e.g. things like the sign difference betweed order/new and order/new/multi), so I'd really appreciate the opportunity to test against the new backend before it goes into place.

Edit: props for your work here btw, and especially for your patience

Finally, some non-FRR discussion. I am glad you are excited about this. I am too! I am working on the simulation environment exactly for that reason. It will give users the ability to test, and try strategies. I believe access will be limited to users who request it and are approved, but I think most people here are exactly the sort of users we want to encourage to test it out.

The API will remain the same, at least the current version (I think we will have a new version of the REST API at some point) and there will be other ways to access the backend. We are going to have the FIX gateway, and the websockets API.

The API will not be affected, because we have a "bridge" that will ensure that the backend can understand the current messages. Of course, all of this requires very rigorous testing. We are moving forward incrementally, and trying to stress test each piece, and run as many "corner cases" to try to catch as many bugs as possible before setting up the simulated environment.

So, basically, although the backend will be completely new, the frontend and the API should continue to function exactly as before. Thanks so much for your comments, I wish more people had responded to that part of my post... 

[eneloop]

There is/was already a lot of discussion about FRR and I read a small part of it only.

Maybe it's a good idea to have at least two or three FRRs: short-(2-7 days), mid-(8-14 days) and longterm (15-30 days)

[Barabbas0]

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