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

[arbitrage001]

If the bid wall is considered fake, why don't traders fill the order and try to push down the rate rather than changing how the platform function?

Ralph should ignore the person shouting the loudest and treat both trader and lender equally.

Yup, that's exactly it. I don't lend any swaps myself so i can't test how bad the manipulation is, but the weird movement in the order book tells me it's happening on a massive scale now. Interesting to know you're being effected by it.

This guy (http://www.reddit.com/user/BitcoinIdiotDude) admits he doesn't offer lending yet accusing the platform of allowing interest manipulation. All he has to do is stop borrowing and interest rate will gravitate down naturally by market force.

Should let people trade on interest rate also. Price discovery serves an important function in market.

[dadugan]

This guy (http://www.reddit.com/user/BitcoinIdiotDude) admits he doesn't offer lending yet accusing the platform of allowing interest manipulation. All he has to do is stop borrowing and interest rate will gravitate down naturally by market force.

Why is BitcoinIdiotDude having so much influence over those of us who didn't bother to speak up until now?

Posting crap on reddit and making accusation without any concrete proof and using "feeling" alone.


Seeing how Bitfinex will response to such response, anytime anyone not happy on the platform/policy, all they have to do is post accusation on reddit without any proof and scream as loud as they can to make Bitfinex caves in.


BitcoinIdiotDude is just mad because he lose a great deal of money trading. Go cry me a river.

[PirateHatForTea]

dadugan, your post doesn't make any sense. BitcoinItdiotDude didn't post an accusation, he posted a primer on how to manipulate BFX rates. Which actually works, by avoiding the compulsory 1 hour interest on swaps taken out, by cycling them through a position. What's more, I don't see how him having lost a bunch of money in the past is in any way relevant to whether or not he should post about possible loopholes in the way BFX's lending platform works.

I hadn't realised the 1 hour minimum charge was only for unused swaps and as a lender I would never have been in favour of this rule anyway - it should be a 1 hour minimum charge for any swap taken. This is the change that Raphael has made in response to this potential loophole. This actually benefits lenders as it means you can no longer be stooged by someone taking out a huge chunk of swap and only paying a few minutes interest on it, and then your funds getting dumped back out to be auto-lent (if you're lucky!) or to sit there waiting for you to create a new offer.

[AdamSmith]

Kind of new to lending.

Why isn't the swap rate on "flash" on demand and offer being matched?

If I manually set my rate to flash rate, my offer isn't being taken also.

[PirateHatForTea]

There are two reasons an offer at a bidded rate might not get taken:

1. If the bid duration is longer (eg 30 days) than the offer the offer won't be taken even at the same rate.

2. If the bid is for an amount larger than the offer, ie the offer cannot satisfy the entire loan demand, the offer won't be taken.

I've only started to notice the second one recently, as people put up bids for eg $300,000 in one block, and I can't fill any of it with my piddly few thousand of $s to lend. I'm not sure whether it fills if the sum of all bids at that rate and maturity add to more than the bid, but I guess that would probably fill it. I'm not sure about this though, can someone from BFX clarify?

[Ente]

There are two reasons an offer at a bidded rate might not get taken:

1. If the bid duration is longer (eg 30 days) than the offer the offer won't be taken even at the same rate.

2. If the bid is for an amount larger than the offer, ie the offer cannot satisfy the entire loan demand, the offer won't be taken.

I've only started to notice the second one recently, as people put up bids for eg $300,000 in one block, and I can't fill any of it with my piddly few thousand of $s to lend. I'm not sure whether it fills if the sum of all bids at that rate and maturity add to more than the bid, but I guess that would probably fill it. I'm not sure about this though, can someone from BFX clarify?

2) isn't the case. As soon as a (part of a) bid and a request match in duration time and rate, they are matched.

1) will be the case whenever the orderbook looks like it overlaps: someone requests funds on a seemlingly higher rate than the best offer, but wants that loan for a longer time period than is offered at that rate.

Ente

[PirateHatForTea]

Ente, that has not been my experience. I have definitely placed offers deliberately matched to an existing bid rate and duration and they have not filled. You can easily test this yourself though.

[picobit]

I have the same experience as PirateHat.  I explicitly make a bid that matches an existing offer, and still don't get it.  I suspected that it was rounding errors on the rate, and bid 0.001% more than the offer, still no match.  After a while, the bid was met, though.  I cannot reproduce it on demand, sometimes things work, sometimes they do not appear to work.

[sonicby]

Can someone provide example request for api method
GET /trades/:symbol

https://api.bitfinex.com/v1/trades/btcusd?timestamp=1403014436
I wanna get old trades history, but timestamp parameter not work. 

[Deviant1]

Hey guys can someone tell me how much you can earn approximately by lending your coins to margin traders on Bitfinex.

Also, are these loans insured?

Thanks!

[Sukrim]

Hey guys can someone tell me how much you can earn approximately by lending your coins to margin traders on Bitfinex.

http://www.bfxdata.com/

Also, are these loans insured?

No, at least not externally. Bitfinex promises that they would cover lender's losses out of their own pockets. That's why they increased their fee by 50% some time ago. Still they can NOT cover all funds lent out (by far), so after a certain point they would just go bankrupt and you'd maybe get about 10 cents on the dollar. Most likely they would rather stop trading for some time before this happens (as they have done in the past).

[AdamSmith]

Hey guys can someone tell me how much you can earn approximately by lending your coins to margin traders on Bitfinex.

http://www.bfxdata.com/

Also, are these loans insured?

No, at least not externally. Bitfinex promises that they would cover lender's losses out of their own pockets. That's why they increased their fee by 50% some time ago. Still they can NOT cover all funds lent out (by far), so after a certain point they would just go bankrupt and you'd maybe get about 10 cents on the dollar. Most likely they would rather stop trading for some time before this happens (as they have done in the past).

They can insure all fund because they have the ability to reverse trade.

Any flash crash that affect lending or solvency of the company, they will just reverse all trades.

[PirateHatForTea]

This is only true/possible to the extent that price rebounds on other exchanges. If Bitcoin went into a non-reversed death spiral for example, or even just underwent a very large drop with cascades that did not bounce back to anywhere near levels before the crash, it is possible for lenders to lose their money.

There is also significant counterparty risk associated with placing your money on an exchange, for lending or otherwise. People hopefully learnt that lesson with Gox. Treat the loan of your money, and even the sending of it to BFX, as being like buying the riskiest of the risky of junk bonds. Do not send/lend more than you can afford to lose.

[AdamSmith]

They have auto liquidate function to liquidate over leveraged users also.

In the event that auto liquidate function not operated as intended, they also have the ability to partially reverse and forward the transactions started from certain point.

[itsproblem2]

Hello,

I try to put a flash return rate lending offer through the API. I read here and being told as well that for the rate of 0 the offer will be a frr one. I get "Offer rate must be positive." as a response when I try to do that.
Can anyone help me and knows how to do this?

Cheers

[PirateHatForTea]

I have the same experience as PirateHat.  I explicitly make a bid that matches an existing offer, and still don't get it.  I suspected that it was rounding errors on the rate, and bid 0.001% more than the offer, still no match.  After a while, the bid was met, though.  I cannot reproduce it on demand, sometimes things work, sometimes they do not appear to work.

I hadn't thought of rounding. That might explain the inconsistent behaviour I've seen - as I recently made an offer to match an existing bid and it was taken even though it only partially filled the bid, consistent with Ente's description.

[PirateHatForTea]

They have auto liquidate function to liquidate over leveraged users also.

In the event that auto liquidate function not operated as intended, they also have the ability to partially reverse and forward the transactions started from certain point.

I don't think you understand what I wrote. Of course they have ability to auto liquidate - it is a key component of margin trading. There is no guarantee that prices cannot fall so fast that when the liquidation is triggered, they haven't already falling past the point where liquidating would recover the lent amount. In fact this has already happened once, on Feb 10 2014.In that instance BFX rolled back the trades, justifying this action by the fact that they had lost the additional liquidity of Bitstamp (I think they ran out of BTC on stamp) and that the cascading margin calls on the resulting thin order book would have taken the price on BFX to zero and wiped everybody out.

Because the price on other exchanges (ie Stamp) never went so low, but remained around the 500s, after a trading halt BFX were able to resume at prices that did not result in underwater margin positions, so the liquidations could be avoided. However, if all exchanges had tanked, this would not have been possible, and many margin positions would have been liquidated, possibly at a loss.

There is nothing preventing a similar flash crash to that of 10 Feb from occurring. Bitcoin is incredibly volatile as we have seen, and nothing is off the table. Reversing trades is not a panacea - not only that but BFX will only do it when it is in THEIR interests to do so. They rolled back trades in Feb because doing otherwise would have killed the entire platform - as Raphael said at the time liquidating every position in the platform and filling the orderbook down to zero.

In the case of a real, market-wide crash, don't expect BFX to roll back trades (how can they when the market has moved on without them?). And don't expect them to reimburse out-of-pocket lenders. They simply don't have the money to be able to do so, and their extremely vague promise to insure loans appears nowhere in the site terms and conditions or other binding contract. This would leave lenders to enforce such a promise through legal action (hint: google promissory estoppel), but then tell me, who do you sue? And where?

I see the promise to insure all loans as motivated by two reasons:
1) To remove the hassle of offering the (mostly useless due to extremely small pool size) optional insurance on loans
2) Needing to justify their desire to capture a greater share of the lending business profits, aka GREED
It is not a promise that is backed up by anything.

Finally, all this is before you even consider counterparty AND regulatory risk - there is still a very real possibility that something could go badly wrong at BFX, a hack, mismanagement, a court case, termination of banking relationships, government crackdown; the list goes on. This could lead to insolvency and loss of funds a la Gox and numerous other exchanges. This additional risk should not be understated.

So AGAIN: DON'T LEND (OR KEEP ON BFX) MORE THAN YOU CAN AFFORD TO LOSE.

PS: BFX staff, I am just trying to highlight the risks inherent in dealing with a platform such as yours, no offense intended. I am actually quite a fan, and have used the platform for trading and lending for some time and am yet to find one better. But I always deal in amounts I'm willing to lose.

[yitingyou]

If authentication is not complete without mention now, but I don't give the authentication data.

[dadugan]

They have auto liquidate function to liquidate over leveraged users also.

In the event that auto liquidate function not operated as intended, they also have the ability to partially reverse and forward the transactions started from certain point.

I don't think you understand what I wrote. Of course they have ability to auto liquidate - it is a key component of margin trading. There is no guarantee that prices cannot fall so fast that when the liquidation is triggered, they haven't already falling past the point where liquidating would recover the lent amount. In fact this has already happened once, on Feb 10 2014.In that instance BFX rolled back the trades, justifying this action by the fact that they had lost the additional liquidity of Bitstamp (I think they ran out of BTC on stamp) and that the cascading margin calls on the resulting thin order book would have taken the price on BFX to zero and wiped everybody out.

Because the price on other exchanges (ie Stamp) never went so low, but remained around the 500s, after a trading halt BFX were able to resume at prices that did not result in underwater margin positions, so the liquidations could be avoided. However, if all exchanges had tanked, this would not have been possible, and many margin positions would have been liquidated, possibly at a loss.

There is nothing preventing a similar flash crash to that of 10 Feb from occurring. Bitcoin is incredibly volatile as we have seen, and nothing is off the table. Reversing trades is not a panacea - not only that but BFX will only do it when it is in THEIR interests to do so. They rolled back trades in Feb because doing otherwise would have killed the entire platform - as Raphael said at the time liquidating every position in the platform and filling the orderbook down to zero.

In the case of a real, market-wide crash, don't expect BFX to roll back trades (how can they when the market has moved on without them?). And don't expect them to reimburse out-of-pocket lenders. They simply don't have the money to be able to do so, and their extremely vague promise to insure loans appears nowhere in the site terms and conditions or other binding contract. This would leave lenders to enforce such a promise through legal action (hint: google promissory estoppel), but then tell me, who do you sue? And where?

I see the promise to insure all loans as motivated by two reasons:
1) To remove the hassle of offering the (mostly useless due to extremely small pool size) optional insurance on loans
2) Needing to justify their desire to capture a greater share of the lending business profits, aka GREED
It is not a promise that is backed up by anything.

Finally, all this is before you even consider counterparty AND regulatory risk - there is still a very real possibility that something could go badly wrong at BFX, a hack, mismanagement, a court case, termination of banking relationships, government crackdown; the list goes on. This could lead to insolvency and loss of funds a la Gox and numerous other exchanges. This additional risk should not be understated.

So AGAIN: DON'T LEND (OR KEEP ON BFX) MORE THAN YOU CAN AFFORD TO LOSE.

PS: BFX staff, I am just trying to highlight the risks inherent in dealing with a platform such as yours, no offense intended. I am actually quite a fan, and have used the platform for trading and lending for some time and am yet to find one better. But I always deal in amounts I'm willing to lose.

Good explanation.

Since they keep all fiat and most of the bitcoin in cold wallet, they can ALWAYS reverse all transactions to the previous stable state and pretend nothing happen. Total fiat and total btc still remain in their control. Swap can be settled using remaining cash and bitcoin in the trader account.

Leverage ratio is 2:1, any flash crash that is less than 50% is non-issue. In case of big crashes, insolvent traders will pay back lender(partially) using bitcoin in their account.

[m5j0r]

Does anyone have any experience with their support team?
Are they reachable quickly via e-mail?

Thinking of doing more trading over there. Fast, good support if ever needed would be great.