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

[DoubleSwapper]

Seems like the manipulators have found a new way to rig the interest rate. Sudden spike to 0.69 %!

Not so sudden:

Not sudden?
Switch the view to 6/12/24 hours and you see how sudden it is.
Over 1.3 m taken out in three tranches clearing out the order book. This is completely uncalled for if you look at the corresponding trading volume. There is nothing in BTCUSD or LTCUSB that would even remotely explain such a move. It's the same exact behavior that has happened many, many times in the past and was explained well by BitcoinIdioitDude. Then it disappeared, now it's back. Let's see how long this lasts. In the past these spikes almost always lasted pretty much exactly one hour. We'll see.

[komar]

Not sudden?

Eh, I mean it's predictable by those volume spikes.
Moreover, such thing happened a week ago, look at my ugly chart.

It's the same exact behavior that has happened many, many times in the past and was explained well by BitcoinIdioitDude. Then it disappeared, now it's back. Let's see how long this lasts. In the past these spikes almost always lasted pretty much exactly one hour. We'll see.

Bitfinex guy said they fixed that bug and a something about shoe size. Do you think we should check it again?

[DoubleSwapper]

Not sudden?

Eh, I mean it's predictable by those volume spikes.
Moreover, such thing happened a week ago, look at my ugly chart.

It's the same exact behavior that has happened many, many times in the past and was explained well by BitcoinIdioitDude. Then it disappeared, now it's back. Let's see how long this lasts. In the past these spikes almost always lasted pretty much exactly one hour. We'll see.

Bitfinex guy said they fixed that bug and a something about shoe size. Do you think we should check it again?

Yes, as I said this has happened many times in the past. In this very thread I've mentioned these spikes numerous times. Not many cared.
From what BitcoinIdiotDude has written BFX had not found this bug for a long times before so they will likely not find this one (if there's a new one) as well. Maybe an intelligent hobby investigator here can find what's up with this again.

[wilfried]

so we have a spike in lending rates, but no ones going long?





high rates ahead



high rates seem to come from short time lenders

[komar]

so we have a spike in lending rates, but no ones going long?

Yes, the whole bunch of money borrowed with fantastic interest rate and there is no any movement at the market.

[DoubleSwapper]

so we have a spike in lending rates, but no ones going long?

Yep. That's what's so amazing about it. These spikes always happen during periods of low volume without any price gains/high volume trades. We can rise $100 and more in a single day and the rate doesn't jump to more than 0.25 but once in a while some player wakes up and thinks to himself "You know what, I should probably borrow myself a cool million dollars and put it in my pocket for an hour without buying a single bitcoin with it"

I would not care too much about this kind of manipulation had I not learned from BitcoinIdiotDude that these guys found a way to not even pay their mandatory 1 hour swap rate. This makes it very cheap to clear out the order book like that. This has probably cost me several hundred dollars of potential swap interest.

Amazingly enough the money hasn't been returned yet. So either they have not been able to lend their funds out at the inflated rates, they are reading this thread and want to prove us wrong or they have found a way to hold the swap for even more than one hour without paying interest.

[wilfried]

have a link to that BitcoinIdiotDude  post you mention?
i am not sure we have proof that no interest is payed, do we?

[komar]

have a link to that BitcoinIdiotDude  post you mention?

Here you are: http://www.reddit.com/r/BitcoinMarkets/comments/28twpj/manipulating_bfx_swaps_for_fun_and_profit_a_howto/

[DoubleSwapper]

have a link to that BitcoinIdiotDude  post you mention?

Here you are: http://www.reddit.com/r/BitcoinMarkets/comments/28twpj/manipulating_bfx_swaps_for_fun_and_profit_a_howto/

And done. They started at 9:11 and on time everything is returned at 11:11. Took them 2 hours this time. It really couldn't be more obvious. 2 hours and no FRR to be seen and now suddenly 450k on FRR.
I was so glad we were done with this shit. Gratz to the guys who had their offers in the 0.6... region and hopefully the swap payment is actually credited.

[wilfried]

but to do like bitcoimdudeidiot describes you need a huge margin. as i understand he says that closing swaps used in a margin position doesnt trigger the one-hour-min-fee.  but the reserved margin does,  doesnt it?

i suggest putting cluttered swap offers at increasing  rates to catch those spikes,  although swaps would be out max 2 hours

... aha,  i think i got it... is it that the min one hour fee isnt triggered by taking a swap,  but by closing it (but not by closing it when its used in a margin position)...?!


well, so whats the problem? margin traders have to check their swap rates and close them if they catched a spike, lenders could catch a spike, but the swaps would be closed very soon. so all that just results just in some swap-market action but sums up to zero (except the margin traders, that dont regularily check their swap costs..)


obviously theres more about that and apparently bfx dit make some changes and did make some changes and did make some changes  (was there any notification about that?) - and it seems kinda fixed now, which raises the question, what did happen today?:
http://www.reddit.com/user/BitcoinIdiotDude

seems reddit is the channel for news from raphael, here´s mainly giancarlos hangout

[wilfried]

here i found the statement of rafael about the today spike

http://www.reddit.com/r/BitcoinMarkets/comments/29vjyf/daily_discussion_saturday_july_05_2014/cip13q6

he says it was the same old manipulation, but from a user who didnt know that he would be charged interest,  haha


so for me this thread is officialy dead, changing to reddit (although i really hate that site)

[DoubleSwapper]

here i found the statement of rafael about the today spike

http://www.reddit.com/r/BitcoinMarkets/comments/29vjyf/daily_discussion_saturday_july_05_2014/cip13q6

he says it was the same old manipulation, but from a user who didnt know that he would be charged interest,  haha


so for me this thread is officialy dead, changing to reddit (although i really hate that site)

Very interesting. Although Raphael has said something simliar before this exploit was even made public by BID so I wouldn't trust that 100  %.

Interestingly enough Raphael seems to be far more active on reddit than this thread (unfortunately). Best is indeed if you just check his reddit post history to spot the important stuff.

[unclescrooge]

Hello guys,

I am here as well

So what happens is a lender borrowing up to his tradable balance (which was high enough to let him borrow all the orderbook or so), and paying interests due (or maybe it will be his evening surprise ). In other words, playing by the rules.

Now from my point of view it was not profitable for him to do this, but as long as users are playing by the rules there is nothing we can do. After all if someone want to borrow as much as he can to spike the rates regardless of his costs, then there is nothing we should do from a free market perspective. Similarly if people want to go long at more than 0.1% per day, there is nothing we can do either...

With that said, all ideas are welcome to ensure that unused swaps are not used for manipulation. We could double charge the closing of unused swaps without using them (but it would penalize legitimate use as well). We could prevent closing unused swaps manually (ie you can only use your swaps in a margin position or let it expires until the end of its period). What else?

Or we can just wait for people to realize costs/benefits of manipulation has become too high.

Anyway thank you for your analysis and have a good day
Raphael

[m5j0r]

@unclescrooge:

I absolutely agree with your view on free markets.
If people are stupid and pay high interest it's their fault. It sucks for those that want to increase their exposure without wiring more USD.. but it's fair this way at least.

In case this should ever become a problem, you could still invest your companies money into swaps at a reasonable rate to keep the margin trading liquid.

edit: +1 for using BM! lets spread that

[komar]

We could double charge the closing of unused swaps without using them (but it would penalize legitimate use as well).

I hope you will not do this.

[noggin-scratcher]

I've lost track in all the different bug reports/changes; is there still any way to take a swap without it being subject to the 1-hour minimum?

I gather that unused swaps are always charged for at least 1 hour, but am I right in thinking that used swaps can be closed without incurring the 1 hour cost, so long as they're not using that as a way to cycle through a stack of unused swaps?

I can see the reasoning for it; allow traders to shop around for a better rate without getting hit with 1-hour fees for every intermediary swap they take, but from the perspective of a lender it feels like I've been told there's a 1 hour minimum and yet there are fairly simple and common scenarios where that's not the case, and it's not easy to tell for a given swap (assuming it closes after less than 1hr) whether I've been credited for an hour or a fraction thereof.

[nrd525]

It looks like the FRR has barely moved due to the spike.  0.159 (before) vs 0.1600% to 0.1604% (after).  And that slight increase might be due to other factors (like a small increase in the swap that wasn't part of the spike).

[bigasic]

Im VERY new to margin trading. Is there a trading guide for dummies? Like somewhere that explains it as if your talking to a  10 year old. I know what shorting, long is etc, but when I go to bitfinex, might as well be a foreign language. Im assuming that most people that trade on bitfinex are experienced forex traders.

[m5j0r]

@bigasic There isn't too much to it really. If you don't change anything and do a margin trade you'll just get the next available swap assigned. Swaps are nothing more but borrowed money for you to increase your leverage.
The swap tab will show you the market for USD/BTC swaps. It's a free market and the rates are therefore floating. Before you open a margin trade you can click "margin available" to set a maximum rate you're willing to accept and if you want to accept variable rates.
There only is one variable rate, they call it "Flash return rate", and it depends on what other people offer currently.

If you've got some specific questions just ask, but that's basically it

[DoubleSwapper]

Giancarlo, Raphael:

Is it possible that there was a bug with the swap interface today (like the one where the rate was accidently divided by 365 recently). I have some open swaps which say they were opened today and are for 5 days although I basically never enter 5 days as a period but it could be a mistake on my side BUT there is something much stranger. I have an open swap that says it was opened at approx. 12:00 today (it's 22:00 now here) and is set to close in 14 hours? One day swap? What is this madness and how can I abuse it? ;-)