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

[nmersulypnem]

Given points 1) and 2) I feel satisfied with the explanation.
But ideally prepayment penalties would make sense as it would give incentives to lenders to offer longer term loans.

no, thats traditional-banking bullshit, we dont need no "penalties" and such stuff

Seriously, the exploit that it is possible to get loans interest free (or whatever that's now called) is known, it is not THAT hard to find out the time when this is calculated every hour and I also have been bitten by this every once in a while - it seems during a rally borrowers just take whatever is there, wait a bit until new lending offers pop up and then take these, cancelling the existing ones. Unfortunately Bitfinex does NOT seem to do interest calculation once an order completes over its lifetime or since the last midnight payment, whatever is shorter, but rather every hour on all active ones, for whatever weird reason.

This would be only fair, not a penalty to pay lenders for at least e.g. 1 hour or 1 day no matter how short in time a loan was taken since again it is possible to end up with nothing. Especially bad if you don't renew loans or don't use autolend and this just gets cancelled.

If the schedule to calculate is the same for everyone, then it seems like anyone with any swap open would be see it. ...so then it's trivially easy to game the system, especially if you use the API and do it with a bot.  This exploit pretty much kills lending for me (sad face).

[1715107160]

1715107160

[1715107160]

1715107160

[1715107160]

1715107160

[1715107160]

1715107160

[sleger]

Given points 1) and 2) I feel satisfied with the explanation.
But ideally prepayment penalties would make sense as it would give incentives to lenders to offer longer term loans.

no, thats traditional-banking bullshit, we dont need no "penalties" and such stuff

yes we do

or then lenders should also be able to claim back their money and force you out in that case if that's what you prefer. There needs to be an incentive to provide longer term loans.

[mooncake]

Dear Bitfinex Customers

The year that has just started will be a crucial one for Bitcoin and all the other cryptocurrencies.
Trading platforms are centralized institutions and need to comply with  different countries' regulations if they want to survive and thrive.
We at Bitfinex decided a long time ago to go for this path, to be fully complaint and to try our best to guarantee the assets of you all. Lawyers are expensive, especially good ones. Also in the last quarter we experienced exponential growth, with the number of both registered and active customers increasing 5 folds.
This of course requires more infrastructure, from a customer support, security, networking, server, etc. point of view.
All this comes of course at an additional cost.

We decided therefore to review our fee ledger as follows:


1)  from 0 to 500 BTC                   :       0.15%
2)  from 500 to 2,000 BTC            :       0.14%
3)  from 2,000 to 5,000 BTC         :       0.13%
4)  from 5000 to 15000 BTC         :       0.12%
5)  from 15,000 to 25,000 BTC     :       0.11%
6)  over 25,000 BTC                        :       0.10%

Numbers are applied on BTC traded in the last 30 days.

Fees for trading Litecoins remain unchanged (0.15%) and the same thing
applies to trades over Bitstamp ( 0.35% ) .

Please notice that we have always been and we remain the best offer in the market, not only for our unique features, but also for our fee level.
No other platform is currently offering our services anywhere close to our
fees.
Some of our competitors allowed free trades in the past ( even though this
was only possible for the BTC/CNY pair) but are now up to a much higher fee
level than ours.
This change will be effective starting from friday the 10th of January at
00:00 GMT.

Last but not least we will also introduce a 1% fee on withdrawals that
require a fast execution (within 24 hrs).
All the others wires will take between 3 and 5 working days and will only
be subject to the current fees ( 10 usd per wire).

Certain of your comprehension I wish you all a happy and prosperous new
year.

Best regards
Raphael
Bitfinex Team

Any fee increase is not welcomed. But given the small increase, it is acceptable. 

A few suggestions for your consideration:

• To make us feel better, perhaps you could organise a fee reduction promotion from time to time? You can reference the previous promotion at BTC China (0% trading fee) and current promotion at Gox (25% reduction);
• Possible to lower the fee for Bitstamp transaction? The lowest fee at Bitstamp is 0.2% for > $150,000. I am sure given BFX volume at Bitstamp, this tier has been hit?

BFX is a great platform. I am sure it will be even better in the new year.

[Ichthyo]

Seriously, the exploit that it is possible to get loans interest free (or whatever that's now called) is known, it is not THAT hard to find out the time when this is calculated every hour and I also have been bitten by this every once in a while - it seems during a rally borrowers just take whatever is there, wait a bit until new lending offers pop up and then take these, cancelling the existing ones. Unfortunately Bitfinex does NOT seem to do interest calculation once an order completes over its lifetime or since the last midnight payment, whatever is shorter, but rather every hour on all active ones, for whatever weird reason.

While it is possible to exploit this, it doesn't seem to be done regularly. On a second thought, from the traders POV, it isn't worth the hassle. You can earn way more by effective trading, but you can also loose way more than the typical order of magnitude of the swap.

I'd guess that this unfortunate gap becomes largely visible only during flash crashes like the last days, where many people open positions during a very short timeframe. But there is the danger for an experienced and planful attacker to exploit this gap systematically, and probably the Bitfinex team is already aware of that.

Without knowing any internal details of the implementation, my guess is that it's non trivial to calculate the swap precisely in a way that scales out on a growing distributed system, since a complete trading position is comprised of N position changes multiplied with M involved loans.

[Ente]

I am a liquidity taker, as it is called now. I sometimes take as much liquidity that I push the interest rate quite a bit. When I do margin trading, I aim for weeks, up to months runtime of my position. So, of course I take all the liquidity I need, and subsequently replace the most expensive contracts with less expensive ones.
I don't care if I replace them within an hour or later. Honestly, those fractions of a percent are completely irrelevant to me, with price swings of several percent, or up to twenty percent a day. If I was to replace all my taken liquidity within an hour, I would take up new liquidity much faster than it is being replaced, the interest rate would skyrocket, and eventually there would be no offers left altogether!
So, people, relax, I am pretty sure this is a theoretical exploit. This here is about Bitcoin trading. Exploiting this for a few cents isn't worth the trouble, makes little sense economically, and won't even work on any reasonable scale.

Liquidity providers: Have a close look at the offers table. Left side, "liquidity offers", typically has many many "2 day" offers, the longer runtime offers start way more expensive. Right side, "liquidity demand", has almost only "30 day" requests, with only very few "2 day" requests with large markdown.

This means two things:
1) Liquidity takers want long runtime. They will pay more for that too. You will receive much more interest if you offer "30 days". First, because a higher rate is accepted, and second, because you don't have a break every other day.
2) The hypothetical user exploiting the "1 hour problem" would always take the least expensive offer, no matter the runtime, and cancel it after a few minutes (and then it takes much longer for such an inexpensive offer to reappear). So, When you offer your liquidity for 30 days at a slightly higher rate, only users will take it who intent to use it for more than two days, and pay the markup for that.

Finally, I pay higher interest for 30 day offers than flash rate. Just so I can predict the total costs of my position better.
So, if you are interested in a high, steady, risk-free income, fire up some 30 day offers! I'll meet you at the liquidity table! :-)

Ente

[Ente]

Gizmoh:
if this still is a problem of you now, on your second day: Tell us what exactly you did offer. Length, rate, fixed or flash rate. Even better, take a screenshot of the offers list at the moment you post it. Then we may figure out what exactly is going on here.
As I tried to write: Being successfull on BitFinex isn't about cutting fractions of a percent on interest fees. It's about Bitcoin trading first, and being in a longterm stable position (with stable interest rate and enough runtime) secondly.

Ente

[gizmoh]

Today i received a reply from support and it answered all my concerns:

The interests are calculated hourly. If the trader closes the position within one hour he will pay one hour interest. Otherwise he will pay interests calculated for each hour the position was opened (up to the next round hour).
Interests are paid every night around 00:00 GMT


So interest for cancelled refunds within the hour is accounted for and credited only at 0:00 GMT.
I 'd like apologized for my tone in previous messages, i was annoyed for getting 50% refunds within the hour, and felt being played seeing my balance staying the same.

@Ente  30 day loans between 0.7% - 0.94 % with half refunded within hours. Maybe its mainly due to yesterday's ending rally and traders closing prematurely their position! Also the ability for borrowers to close a loan anytime and take a new offer at a better rate. While the lender is stuck at his pre-set rate and time..

[Arthur Randolph]

Also the ability for borrowers to close a loan anytime and take a new offer at a better rate. While the lender is stuck at his pre-set rate and time..

That sounds exactly like how loans work. You're welcome to refinance or pay back by anticipation any time you want and the bank is not allowed to kick you out of your home.

[nrd525]

Banks have penalties for early payment of mortgages.

If you want a way out of this lender vs borrower situation - try to think about what could increase both people's profit at the same time.

Hint: it has to do with capturing marginal utility that currently isn't captured.

[Sukrim]

Much more than chasing a few missed cents here and there on interests I would love to see the following 2 changes in history (at least until we have it finally downloadable or accessible via API):

* no "about 3 hours ago" stuff, always a timestamp
* year included in timestamp (e.g. 08 Jan 2014 13:37)

That would already be enough to at least build a parser manually until we can get that history exported officially. I have the data for 2013 at least now, which is enough for my tax statements - still it'd be great to just get a csv file and be done with it in the future.

Also congratulations to the guy/girl signing up through my reflink and trading enough to pay already a few 100 USD in fees (I receive 10% of these) - hope you made some nice profits with that!

[Spaceman_Spiff]

I am getting:

'Secure Connection Failed

An error occurred during a connection to www.bitfinex.com. The OCSP server has no status for the certificate. (Error code: sec_error_ocsp_unknown_cert)'

EDIT: up again

[Sukrim]

Here as well, let's hope that's part of adding even more power to the system!

[superbit]

Here as well, let's hope that's part of adding even more power to the system!

Same

Edit: Back up for me

[Timetwister]

Is this correct? Is people really paying 0.35% daily for USD?

[TwinWinNerD]

Is this correct? Is people really paying 0.35% daily for USD?

Short answer: Temporarly, yes.

[arbitrage001]

Overall, I find this fee raise a total scandal and I am immediately switching over to an exchange with lower fees and the same great set of of features and supperb service since that's easy to find... in a dream or something.

It is better to pay a slightly higher fee to a trusted exchange and not have to worry about the owner run away with your money than use an exchange with lower fee and have to constantly worry about getting scammed.


Beside, I do not think there is any exchange out there with this level of service out there with lower fee. If you come across an exchange with the same level of caliber, please kindly inform us so we can use it too.

[Ente]

Same here,

Secure Connection Failed
An error occurred during a connection to www.bitfinex.com.
The OCSP server has no status for the certificate.
(Error code: sec_error_ocsp_unknown_cert)

+1 on fees calculated from USD volume instead of BTC volume.
And, I can't check because of the connection problems: Is there a place to check the last 30 days volume?

I find the fees themselves reasonable.

Ente

[Timetwister]

Is this correct? Is people really paying 0.35% daily for USD?

Short answer: Temporarly, yes.

And why is people paying so much interest? It's absurd.

[Sukrim]

Is this correct? Is people really paying 0.35% daily for USD?

Short answer: Temporarly, yes.

And why is people paying so much interest? It's absurd.

Because the money you gain from trading is much more absurdely high. With Bitfinex you can even profit from falling prices leveraged and daily changes alone are MUCH larger than on some (most?) other assets out there.

It's not even that much, I lend out money at even higher rates right now.

[Timetwister]

With Bitfinex you can even profit from falling prices leveraged

Don't you need to take BTC in that case, to short them, instead of USD? Isn't taking USD for buying bitcoins (going long)?