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

[21pilot]

5. several reported litecoin withdrawal problems.

this is the first time I´m reading about these alleged litecoin withdrawal problems 

Besides, I think their strategy isn´t to run off with the funds in the worst case scenario.
I rather expect them to handle it similar to the last flash crash where they simply freeze trading and
do a roll-back of trades.

This would also explain why they don´t respond to your concerns because obviously that would once
again show that lenders would get saved on the cost of the traders who won´t get their profits of
shorts (obviously these profits would be insane in case of a huge BTC crash).

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[DoubleSwapper]

It looks like Raphael hasn't logged into bitcointalk for about two days. Is this unusual?

No activity on his reddit account (where he is at least that active) as well. So many aspects that make me feel uneasy.

5. several reported litecoin withdrawal problems.

this is the first time I´m reading about these alleged litecoin withdrawal problems 

Besides, I think their strategy isn´t to run off with the funds in the worst case scenario.
I rather expect them to handle it similar to the last flash crash where they simply freeze trading and
do a roll-back of trades.

This would also explain why they don´t respond to your concerns because obviously that would once
again show that lenders would get saved on the cost of the traders who won´t get their profits of
shorts (obviously these profits would be insane in case of a huge BTC crash).

As it was written so many times they can only do this if this is a temporary flash crash. If we go to 200 (and I'm explicitely stating a value of 200, not something outrageous like 1 dollar) with a flash crash and stay there they are done for. What would they do?

[21pilot]

...

As it was written so many times they can only do this if this is a temporary flash crash. If we go to 200 (and I'm explicitely stating a value of 200, not something outrageous like 1 dollar) with a flash crash and stay there they are done for. What would they do?

the crazy volatility from the last years is probably gone for good.
You won´t see another big BTC crash where BTC goes to something like 200 $.

BTC has matured and lots of big players entered (venture capital going into bitcoin infrastructure ...).

I will be buying at 550, 500, 450 ... all the way down.
And I guess many smart people + a few of the really big whales will realize this opportunity to pick up large amounts of BTC and do it like me.

Therefore I don´t really think BTC will fall below 500 $ at any single point in the future  

The only situation where you would get your heavy BTC crash is when a major bug in BTC is found.
But BTC has now been around for years and lots of very intelligent people haven´t found a major flaw in the bitcoin
transaction protocol therefore I also think this possibility is very unlikely.

The APR for offering swaps is still quite good and I completely trust Raphael + Giancarlo with my money.
Even if I wouldn´t trust them I think keeping the site running is way more profitable than running off with the user deposits.

(legit income from exchange + lending fees > short-term gains by thief)

[21pilot]

one additional remark:

I don´t really get how people can complain about the orderbook at bitfinex being too thin.

2 major reasons why I think this is seriously retarded:

1. hidden orders -> lots of the big whales use hidden orders... therefore no one of you knows the true amount of bids (except Raphael + Giancarlo)

2. many people who would pick up BTC all the way down in case of a price decline haven´t already put in their bids (why should they keep unnecessary funds in open bids?)
They will wire it to bitfinex as soon as buying opportunities arise.
Therefore I think the true amount of bids will increase substantially in case of a BTC price decline.

[m5j0r]

There's a weird bug happening right now (browser independent):
"close"/"claim" displaced


My tradable balance also shows an insane negative amount right now.
Devs, clear this up!!!

If you change stuff on your platform why don't you test it out first..

Edit: That weird displacement is gone now. My balance is still negative. If someone had to use his "tradable balance" right now, this could potentially cost real money!

Edit2: Just saw the announcement.. I don't quite get why that would change my tradable balance at all, but if it has something to do with it it would have been great to know beforehand

[Ente]

There's a weird bug happening right now (browser independent):
"close"/"claim" displaced


My tradable balance also shows an insane negative amount right now.
Devs, clear this up!!!

If you change stuff on your platform why don't you test it out first..

Edit: That weird displacement is gone now. My balance is still negative. If someone had to use his "tradable balance" right now, this could potentially cost real money!

Edit2: Just saw the announcement.. I don't quite get why that would change my tradable balance at all, but if it has something to do with it it would have been great to know beforehand

My position is all in the red as well!!!1!

Oh, wait, that's not a bug.. oops

Ente

[m5j0r]

@Ente: BFX is not responsible for your trading failure lol
Edit: you might not want to do a fullquote when the user you're referring to is just right above you..

@all: The tradable balance bug has been fixed now.
contradicting the announcement, the new swap system seems to be live already.


@BFX: Really, before you change a live system test it. And for gods sake work on your communication skills.
Also, please clarify on how the new "term" swap option works. Are you basically piling up daily compound interest by paying for swaps with new swaps? I liked to see how much swap I got on a position. This would get complicated if it was paid daily and therefore set to 0. Not keen on having to log this daily.

As a trader I would like to know exactly how the changes affect my profits beforehand to make an educated decision.

edit2: @BFX:
-A good idea to help your communication would be to change the OP of this thread. People don't want to read through the last pages just to find out what happened if they didn't get it straight away. The OP even still says you don't have your own orderbook.
-A newsticker with a yellow background or whatever on top of every BFX page you open would def help. I for one rarely look at bitcointalk if I'm busy and I don't have to. On the other hand every trader will see the BFX page.

[urwhatuknow]

Upcoming changes in our margin trading feature


Dear customers,

In an ongoing effort to provide our customers with the best possible trading experience, we are pleased to announce several enhancements to our swaps system. As the swaps market continues to grow, we continue to be extremely focused on ensuring that it operates as fairly and efficiently as possible, while mitigating systematic risks to the greatest extent possible.

Self Funding: To the extent that a trading wallet’s collateral is the correct currency, it will now be automatically used to offset the position’s swap requirements. For example, if a trading wallet contains USD, and the position is long BTCUSD, the USD borrowing requirement will be reduced by the amount of USD collateral. We believe that this change will result in significant cost savings to traders and help make the closely watched aggregate swap statistics more meaningful. This new feature essentially allows traders to pay no swap interest when the positions size is less than their collateral, i.e., “unlevered” (provided, of course that the collateral is held in the correct currency), and avoids the clumsy process of claiming unlevered position as this feature effectively enables traders to perform the economic equivalent of a “partial claim” when the position is reduced in size of more of the correct collateral is deposited in the trading wallet.

Daily Settlement: Up until now, swap interest to liquidity providers has always been paid daily, but swap interest from traders is only collected when the positions is closed. While this makes sense from a certain perspective, it has the unintended consequence of effectively putting Bitfinex in the position of making 0% loans to cover the payments imbalance created by large “unrealized swap” balances, which really should be serviced by the P2P facility that we already have in place. Moreover, from a balance sheet perspective, we feel that it simply makes more sense to match the frequency of the collection and payment process. In order to implement this change, traders will need to select how they wish these daily payment to be made. The system will support a new variable for each position, “Swap Type”, which can have one of two values:

Daily (default): Swap interest will be automatically deducted from the collateral in trading wallet of a daily basis. If the correct currency is not present, an appropriate conversion will be performed to satisfy the payment.
Term: Swap interest will be capitalized in to position every night by automatically accessing swap offers to cover the required payment.
Existing positions will be phased into this process, with daily “catch-up” payments of no more than 10,000 USD.

These first two changes will be active on the 21st of July, 2014.

Real-time Autorenew: In the past, the “autorenew” feature for offering swap liquidity was only processed once every 15 minutes, which could sometimes create an offer “vacuum” if large positions were being opened and closed quickly during periods of heightened volatility. We have reduced that interval to less than one minute as we approach a true real-time solution to this important feature.

Swap “Bot”: We will soon be offering traders the ability to automatically replace the swaps that fund their positions with cheaper ones should they be available at the same or better terms, eliminating the rather laborious manual process that is available today. There are many nuances to making this work efficiently and it will be offered on an “opt in” basis, but we anticipate that this feature will make the swap market much more efficient and reduce volatility in the average swap rates. We will provide further updates on the specific functionality by the end of July.

Once again, we wish to thank all of our customers for their continued loyalty, which, in recent months, has made Bitfinex the number one platform for BTCUSD liquidity as measure by trailing 30 day volume. We look forward to serving the community’s ongoing trading needs as we continue to update and improve our trading platform.

As always, we welcome your feedback.

Best regards,
The Bitfinex team

[Sukrim]

Other than lowering risk, do you have stuff in the pipeline for lenders too? Eg switching loans for ones on the market that are the same rate or better so it is easier to lend out for longer periods and still get some money out quickly in case of an emergency.

Another nice feature for lenders would be the ability to offer higher leverage and not just longer duration. If someone wants 10k USD at 1% a day for 10:1 trading for a week, I'd do that in the current market. This might be subject to limits of course to not increase your global leverage too much but would be something where lenders could charge more and traders probably also would pay more.

Thanks for the updates by the way, much appreciated.

[nby]

I have a question too.

Assume I hold a LONG BTC position with the swap set to TERM.

Term: Swap interest will be capitalized in to position every night by automatically accessing swap offers to cover the required payment.

How will this work, in case the position is full leveraged but still above the margin call level,
i.e. the Tradable Balance is equal or less than 0  and the Margin Balance is above the Required Margin ?

Thank you

[unclescrooge]

Hello guys,

To answer some questions:

-You can already chose your swap type, daily or term, on your active positions. But the change will be active only after the 21st of July. We offer you this option now in order for long term position holders to make sure to set their preferences before the change is active


-Regarding the "term" option: yes we are compounding interests payment. WHich is why the default option is "daily", and which is why if you plan on holding a long term position be carefully with this. I hope you understand the reasoning here: paying lenders at the end of their swaps but charging traders at the term of their position meant we were lending money at 0%. Which poses legal problems, and increased our risk by using our capital for what it was not supposed to be used.

"How will this work, in case the position is full leveraged but still above the margin call level,
i.e. the Tradable Balance is equal or less than 0  and the Margin Balance is above the Required Margin ?"

We will still borrow additional swap to match your unrealized swap, no matter your tradable balance.

One last change that is upcoming on the 21st of July as well:

Leverage calculation: The currency that is used as collateral for your open position(s) does impact your risk of default in case of a forced liquidation. If you have 3 BTC and take a 6 BTC position, your true leverage, regarding exposure to BTCUSD price, is 3:1, not 2:1. We thus will include the collateral that is not in the last currency of a traded pair as part of the position cost (ie all non-USD collateral for BTCUSD and LTCUSD positions, and all non-BTC collateral for LTCBTC positions).

Your tradable balance is equal to:

( Your leverage * your margin balance (in USD) + your unrealized profit + your unrealized swap) - your position(s) cost (in USD)

Today, your position cost is equal to:

( your position base price * your position size )

After this change, your position cost will be equal to:

(your position base price * your position size + ((your position base price * your position size in USD) - your USD trading balance)
Ok, what does it means in simple term:

1st example

Current BTC price is 600 USD/BTC, and you have a leverage of 2.5:1

If you have 1 BTC, you can open a 1.5 max long or short BTCUSD position
If you have 600 USD, you can open a 2.5 max long or short BTCUSD position

Each dollar you add in your trading wallet will allow you to increase your tradable balance

2nd example

Current LTC price is 0.02 BTC/LTC, and you have a leverage of 2.5:1

If you have 1 LTC, you can open a 1.5 max long or short LTCBTC position
If you have 0.02 BTC, you can open a 2.5 max long or short LTCBTC position

Each bitcoin you add in your trading wallet will allow you to increase your tradable balance

Edit: Existing positions will not be touched/forced liquidated
It only impacts your tradable balance, not your liquidation price.

Let me know if you have any questions
Raphael
Bitfinex team

[LOADING.READY.RUN]

So that means, among many changes that make sense to me, you're further reducing the effective leverage for going long by 1? So, in the "old" way of counting leverage down from 2.5:1 to 1.5:1? That sucks...

[urwhatuknow]

So that means, among many changes that make sense to me, you're further reducing the effective leverage for going long by 1? So, in the "old" way of counting leverage down from 2.5:1 to 1.5:1? That sucks...

We might increase leverage in the future if we see our swap market is cooling off a little.
For the time being we believe it's a good idea, for the sake of traders, liquidity providers and the bitcoin market to slow down a little the growth of our swap total market.

I hope this helps.

Have a good day

Giancarlo
Bitfinex Team

[unclescrooge]

Just a side note:
Existing positions will not be touched/forced liquidated
It only impacts your tradable balance, not your liquidation price.

Raphael

[LOADING.READY.RUN]

Hi Giancarlo,

Thanks for your reply. Even as a trader I agree that the safety of the lenders should be of highest concern.

It's just  disappointing for me as I've learned to be really cautious and get into leveraged positions slowly and with tight stops as to keep my potential losses very low.

I generally like your platform and I really appreciate the way you're trying to implement feature suggestions by users and show that you care... And you've improved a lot in the last year at communicating technical changes/maintenance clearly and in time. But this is the point for me to take a new look at what other exchanges have to offer...

[Vjkxf]

кaк вывecти 1.08 лaйтa c этoгo кeтaйcкoгo финикa мoзг ceбe cпaлил yжo)

[Xiaoxiao]

Thank God for SWAP BOT!!!!! and other new features coming!  happy trading!!!!

[komar]

Why did you stopped to calculate Bitfinex Sentiment Index? Am I the only man who find it useful?

кaк вывecти 1.08 лaйтa c этoгo кeтaйcкoгo финикa мoзг ceбe cпaлил yжo)

Withdraw нe paбoтaeт, чтo ли?

[DoubleSwapper]

I'm very happy to see that the Bitfinex Team is still working so intensively on the platform and it's possibilities.
From reading through these changes as a swap provider I'm going to assume that they will decrease the lending rates in the long term, but and this far important in my opinion they also have the potential to take off some of the huge leverage the platform is already on. Keeping the system stable and crash free is of the highest priority even if it hinders additional short term gains. Good Job, BFX. I now understand why you may not have had the time to answers questions in the last three days here.

Hi Giancarlo,

Thanks for your reply. Even as a trader I agree that the safety of the lenders should be of highest concern.

It's just  disappointing for me as I've learned to be really cautious and get into leveraged positions slowly and with tight stops as to keep my potential losses very low.

I generally like your platform and I really appreciate the way you're trying to implement feature suggestions by users and show that you care... And you've improved a lot in the last year at communicating technical changes/maintenance clearly and in time. But this is the point for me to take a new look at what other exchanges have to offer...

You should realize that by using BTC as a collateral for a long position you effectively had more leverage than intended and that using the volatile part of a very volatile trading pair assumes additional risk not only to you but to the whole market in case of a sudden drop. If you want to get into insane leverage you should check btc.sx. They offer 10 X leverage and from what I have read so far are guarranted to rip you off through large gaps, unfair stops and high slippage.

[LOADING.READY.RUN]

You should realize that by using BTC as a collateral for a long position you effectively had more leverage than intended [...]

You can't be serious! What you're implicitly saying is that the BFX team wasn't smart enough to notice this earlier!? I think they are doing a very good job and they're fully capable of understanding the consequences of previously allowing this. I assume they know why they're taking this decision now (and that they were fully aware of the previous leverage), which still doesn't mean I like it for my trading profile.

If you want to get into insane leverage you should check btc.sx. They offer 10 X leverage and from what I have read so far are guarranted to rip you off through large gaps, unfair stops and high slippage.

I don't want insane leverage, especially not on a platform with that large a spread. But with a proper risk management you can safely handle the bfx leverage as it currently is, and even the 4:1 they used to have (even in parts of the November bubble bull run, believe it or not!), if you tread cautiously. It isn't my fault that some traders don't practice a proper risk management and don't stop bad trades early. I understand that BFX wants/has to play safe, but I personally would prefer more leverage.