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

[Dalmar]

I second this new feature request. And while I'm here I will point out that with this massive increase in volume of swaps currently lent out the daily fees collected by bitfinex also has spiked. 31 million at 0.16% is around 50,000 per day.  Maybe we could move fees back to 10%.  This would also help to keep a competitive edge on the new Chinese players in the swap market.
Who wants lower fees?

BFX and CNY exchanges are not true competitors. A lot of Western traders do not trust bitcoin exchanges in PBOC jurisdiction and their volume figures also do not seem trustworthy. They probably can get away with charging more while not losing out to CNY exchanges.

[stevec]

While returns to lenders are relatively high, I'd actually prefer that BitFinex stick to the current rate. Lenders still get good returns, and BitFinex can use the income to increase their reserve capital. Seems like a win/win for everyone.

That way when things go tits up (which they will at some stage), it's more likely that they'll have the reserves to cover any losses.

[HerrAndreas]

just saying, hot wallet might need some attention as tiny btc withdrawal (#147277) is "stuck" since close to ten hours.

[medicine]

While returns to lenders are relatively high, I'd actually prefer that BitFinex stick to the current rate. Lenders still get good returns, and BitFinex can use the income to increase their reserve capital. Seems like a win/win for everyone.

That way when things go tits up (which they will at some stage), it's more likely that they'll have the reserves to cover any losses.

You actually think Bitfinex is going to cover loses if disaster strikes the bitcoin market? Can we have Bitfinex's official position on this please. I don't think the "insurance" term was ever explained/defined before.
Thanks.

[HerrAndreas]

just saying, hot wallet might need some attention as tiny btc withdrawal (#147277) is "stuck" since close to ten hours.

funds meanwhile received. issue resolved.

[Ente]

I think it is real.  I expect swap to increase rapidly so long as the interest rate is this high.  The real mystery is why the bids and asks refuse to settle on a price as they are so close to each other (and the term length differences should be less of a factor as you can probably renew at the FRR in the near future and it has been very stable recently)

Well, yes, this looks strange and daunting:



Still, most of the "offers" are short-term offers, and 2.2M of the 3.3M offers are for FRR.
On the "demands" side, we almost exclusively have "30 day" demands. And zero FRR demand.
Yes, it's interesting that this isn't resolved.. With the current astronomical amount of offers, they could take out the demands completely, at 1.4M only.

Strange times. It'll all change soon enough, when the exchange rates gets moving again, eh?

Ente

[TwinWinNerD]

I think it is real.  I expect swap to increase rapidly so long as the interest rate is this high.  The real mystery is why the bids and asks refuse to settle on a price as they are so close to each other (and the term length differences should be less of a factor as you can probably renew at the FRR in the near future and it has been very stable recently)

Well, yes, this looks strange and daunting:



Still, most of the "offers" are short-term offers, and 2.2M of the 3.3M offers are for FRR.
On the "demands" side, we almost exclusively have "30 day" demands. And zero FRR demand.
Yes, it's interesting that this isn't resolved.. With the current astronomical amount of offers, they could take out the demands completely, at 1.4M only.

Strange times. It'll all change soon enough, when the exchange rates gets moving again, eh?

Ente

Actually the 30 day FRR offers get taken very fast. The 2 M are very short FRR offers that are there for a couple of days.

[Ente]

Actually the 30 day FRR offers get taken very fast. The 2 M are very short FRR offers that are there for a couple of days.

Are you sure?
I am watching this



for some time now, and it is stuck with "FRR volume: 0" for ages.
Also, there are 30 day offers at FRR available.
But then I only have a look now and then, maybe coincidence.

Still, that view is impressive.. That's what I would call a "wall"! :-)

Ente

[TwinWinNerD]

Actually the 30 day FRR offers get taken very fast. The 2 M are very short FRR offers that are there for a couple of days.

Are you sure?
I am watching this



for some time now, and it is stuck with "FRR volume: 0" for ages.
Also, there are 30 day offers at FRR available.
But then I only have a look now and then, maybe coincidence.

Still, that view is impressive.. That's what I would call a "wall"! :-)

Ente

What I mean with "very fast" is once the volume spikes on a given day the offers are always taken first and normally you don't have to wait more than 1 hour on average. Yes, some days are very "slow" but everything over 15 day FRR is taken quite often. Lower than that can stay idle for days!

The wall is epic, but I am not sure the 2 M USD are really "in the market" because I can't imagine a guy that rather has his funds sit idle for days to weeks than just going down a bit with his offer or increasing the lend time.

[climbguy]

I have read some information in earlier post, but I am unclear on several aspects of the platform.

I am primarily interested in being a liquidity provider and have the following questions:

1. One of the slides on the homepage advertises "Put up your swap offers. Enjoy great and insured return rates on dollars, BTC or LTC paid by other traders willing to short or leverage BTC or LTC."  Insured by whom?

2. Does this 'insurance' protect against a flash crash?

3. Is market data available for what % of leveraged funds are used in long vs short positions?

4. How is client money handled, what sort of separate accounts (if any) are used?

5. Have they had any sort of 3rd party audits?  If so are they publicly available?

[0x3d]

So what's up with your new PR-guy? So many questions piled up in here since his (admittedly, kind of promising) introduction about a week ago yet no "better PR" could be observed as of yet.

Call me crazy but I think I'm starting to miss Giancarlo. His rants were at least some PR which is still, most of the time, better than no PR at all

[madken7777]

Is the platform down?

[pitchbend]

1 By them. Of course we don't know the extent of the insurance, the only thing we know is that they increased the fee to cover defaults in case of a flash crash (or so they said), still they can't obviously cover everything if a shit storm big enough strikes, in this case lenders are probably fucked.

2 Again a matter of speculation since no real numbers or info are shared on this, probably they can cover a mild flash crash, but who really knows exactly.

3 bfxdata.com and their statistics page is all the market info available

4 Who knows, they don't and probably won't share any specifics

5 No

The high return for your money comes at a price, you'll have to decide if the return is worth taking the risk.

I have read some information in earlier post, but I am unclear on several aspects of the platform.

I am primarily interested in being a liquidity provider and have the following questions:

1. One of the slides on the homepage advertises "Put up your swap offers. Enjoy great and insured return rates on dollars, BTC or LTC paid by other traders willing to short or leverage BTC or LTC."  Insured by whom?

2. Does this 'insurance' protect against a flash crash?

3. Is market data available for what % of leveraged funds are used in long vs short positions?

4. How is client money handled, what sort of separate accounts (if any) are used?

5. Have they had any sort of 3rd party audits?  If so are they publicly available?

[medicine]

1 By them. Of course we don't know the extent of the insurance, the only thing we know is that they increased the fee to cover defaults in case of a flash crash (or so they said), still they can't obviously cover everything if a shit storm big enough strikes, in this case lenders are probably fucked.

2 Again a matter of speculation since no real numbers or info are shared on this, probably they can cover a mild flash crash, but who really knows exactly.

3 bfxdata.com and their statistics page is all the market info available

4 Who knows, they don't and probably won't share any specifics

5 No

The answer to number 5 is incorrect.  There was an Audit done.
AUDITOR: Stefan Thomas
AUDITED ENTITY: iFinex, Inc., https://www.bitfinex.com
ROOT HASH: 37c49d606c61aab140726265099992c3dd0fba30e1ce1a8a04f0e56cec6dc19f
BLOCK HEIGHT: 294378
RESULT: >100% reserves

The audit is arguably dated now as it was completed on April 5th 2014.  It would be nice if this type of audit was carried out frequently.

[Ente]

Yes, a lot of questions piled up in the meantime.

- what is the legal structure behind BitFinex?

- how does the 'insurance' work, for whom, to what degree, when? Who will fall through the cracks, when the insurance isn't sufficient?

Josh, feel free to chime in on this at any time :-)
Also, I would suggest every PR guy in such a situation to have a sound system so no questions get lost. The introduction is now six pages ago..

Ente

[lemming78]

Hello guys, i have just one question. I have a loan stuck in the swap section. I tried to borrow money to close the swap but i have no sufficient funds. How can i close the swap earlier?

[TwinWinNerD]

Hello guys, i have just one question. I have a loan stuck in the swap section. I tried to borrow money to close the swap but i have no sufficient funds. How can i close the swap earlier?

You lent some funds?

Then there is no other way than waiting for it to expire, or the guy that took it to close it.

[lemming78]

Hello guys, i have just one question. I have a loan stuck in the swap section. I tried to borrow money to close the swap but i have no sufficient funds. How can i close the swap earlier?

You lent some funds?

Then there is no other way than waiting for it to expire, or the guy that took it to close it.

thanks. I do not understand why i can't borrow funds. The borrowing would be backed by the loan..

[TwinWinNerD]

Hello guys, i have just one question. I have a loan stuck in the swap section. I tried to borrow money to close the swap but i have no sufficient funds. How can i close the swap earlier?

You lent some funds?

Then there is no other way than waiting for it to expire, or the guy that took it to close it.

thanks. I do not understand why i can't borrow funds. The borrowing would be backed by the loan..

That is not how it works. Borrowed funds can only be used to do margin trading. Lent funds are locked away and do not count as account balance!

[mjr]

Yes, a lot of questions piled up in the meantime.

- what is the legal structure behind BitFinex?

- how does the 'insurance' work, for whom, to what degree, when? Who will fall through the cracks, when the insurance isn't sufficient?

Josh, feel free to chime in on this at any time :-)
Also, I would suggest every PR guy in such a situation to have a sound system so no questions get lost. The introduction is now six pages ago..

Ente

Hi Ente, I am reading and listening to all these questions, and aggregating them and getting answers. This is my first week, so I am still trying to figure out the answers to all of the great questions that have been asked here.

We are working on getting you answers to those specific questions. I, of course, cannot make any statements without first getting the correct information.

Sorry for any delay, know that we are working behind the scenes to clarify all of the confusing aspects of our platform. I am working, right now, on a new FAQ, which should answer all these questions and more.

Regards,
Josh

P.S. Building a "sound system" as you described is also one of the projects I am working on. This medium, as a way to collect information, is less than ideal. This thread alone is over 200 pages long, so while I have been skimming through this thread, and others, I will probably not be able to know 100% of what has been said before.