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Poll
Question: Do you agree with this change?  (Voting closed: January 21, 2012, 02:56:01 AM)
Agree - 59 (45.7%)
Disagree - 40 (31%)
Bitcoinica is doomed (Neutral) - 30 (23.3%)
Total Voters: 128

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Author Topic: Vote for Bitcoinica Leverage Change Proposal  (Read 3836 times)
zhoutong
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January 18, 2012, 02:56:01 AM
 #1

EDIT:

The poll hasn't ended yet. But we have started a trial. Unless the poll results reverse, we will keep this change.

---

Public Proposal: Change of Leverage Options.

Due to recent volatility, a lot of traders were forced liquidated and caused a snowball effect: forced liquidation causes more forced liquidations due to excessive market movements.

Also, we want to make sure that Bitcoinica always has reserves for traders. We hope the asterisk will not appear frequently in the future.

Therefore, I propose a solution to such problems. Since this solution may negatively impact some of our customers, we want to hear the voice of the public. This is how the implementation will be decided:

If Agree > Disagree, we will implement this change. If Disagree > Agree, we will not implement this change and we will consider other options.
Neutral votes will be ignored at the moment.

If you have better ideas, please voice out and we will consider.

So what's the change?
-------------------------

If your margin balance is less than $2,000 (inc.), you can set leverage to 10:1, 5:1, 2.5:1 and 1:1.

If your margin balance is between $2,000 (exc.) and $20,000 (inc.), you can set leverage to 5:1, 2.5:1 and 1:1.

If your margin balance is greater than $20,000 (exc.), you can set leverage to 2.5:1 and 1:1.

This is to protect our customers' interest and maintain market volatility at low levels by preventing huge forced liquidations as much as possible. Also, less funds will be used up by large clients so we will have more available reserves.

Now, please vote!

Founder of NameTerrific (https://www.nameterrific.com/). Co-founder of CoinJar (https://coinjar.io/)

Donations for my future Bitcoin projects: 19Uk3tiD5XkBcmHyQYhJxp9QHoub7RosVb
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ineededausername
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January 18, 2012, 02:56:54 AM
 #2

One word: sockpuppets.

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Blitz­
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January 18, 2012, 03:00:02 AM
 #3

It is still possible to game this by creating multiple accounts and doing a coordinated trade.

Bitcoinica is doomed.

"Bitcoin had been transformed from an anarachistic challenge to the financial status quo, to the crypto spawn of Satan, fuelled by cut-throat greed and delusions of avarice." - MatTheCat
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zhoutong
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January 18, 2012, 03:02:17 AM
 #4

It is still possible to game this by creating multiple accounts and doing a coordinated trade.

Bitcoinica is doomed.

We allow that. At least that will split forced liquidation to multiple orders at different prices.

If someone deliberately do a coordinated trade to maintain identical base prices, then it's their choice. We just want to make losing money a bit harder and less impactful even when it happens.

Founder of NameTerrific (https://www.nameterrific.com/). Co-founder of CoinJar (https://coinjar.io/)

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ArsenShnurkov
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January 18, 2012, 03:04:48 AM
 #5

Strongly disagree.

You should take voices into account according to margin ballance.
So you should rerun poll at your site.
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January 18, 2012, 03:05:40 AM
 #6

Most successful parasite species avoid sucking their host completely dry. Good call on the tiered leverage.
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January 18, 2012, 03:06:14 AM
 #7

It is still possible to game this by creating multiple accounts and doing a coordinated trade.

Bitcoinica is doomed.


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January 18, 2012, 03:08:07 AM
 #8

This all adds up to 5 to 1 on avg for everyone..


I fail to see how this will help volatility.

Is not a delayed liquidation one way to go ? albeit hard

The liquidations happen because of the faux liquid market you are building here..

On further thought, its more like 4 to 1 levy for everyone

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January 18, 2012, 03:09:28 AM
 #9

gotta keep the zombies alive.
zhoutong
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January 18, 2012, 03:11:04 AM
 #10

Strongly disagree.

You should take voices into account according to margin ballance.

I believe that people with large accounts will generally vote for "disagree" since they are the impacted ones.

However, we hope everyone can understand for each other, even at the free market. We will revise the threshold amount when our reserves are larger. (We will lift the threshold to $5,000 and $50,000 when our reserves reach $1 million, and we can hopefully reach there in 6 months.)

Currently, even 2.5:1 for a huge account is a lot of leverage! $20,000 will get you $50,000 tradable balance.

Founder of NameTerrific (https://www.nameterrific.com/). Co-founder of CoinJar (https://coinjar.io/)

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zhoutong
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January 18, 2012, 03:12:42 AM
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gotta keep the zombies alive.

Overall loss in recent 24 hours: less than 20%.

Founder of NameTerrific (https://www.nameterrific.com/). Co-founder of CoinJar (https://coinjar.io/)

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pirateat40
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January 18, 2012, 03:15:04 AM
 #12

Public Proposal: Change of Leverage Options.

Due to recent volatility, a lot of traders were forced liquidated and caused a snowball effect: forced liquidation causes more forced liquidations due to excessive market movements.

Also, we want to make sure that Bitcoinica always has reserves for traders. We hope the asterisk will not appear frequently in the future.

Therefore, I propose a solution to such problems. Since this solution may negatively impact some of our customers, we want to hear the voice of the public. This is how the implementation will be decided:

If Agree > Disagree, we will implement this change. If Disagree > Agree, we will not implement this change and we will consider other options.
Neutral votes will be ignored at the moment.

If you have better ideas, please voice out and we will consider.

So what's the change?
-------------------------

If your margin balance is less than $2,000 (inc.), you can set leverage to 5:1, 2.5:1 and 1:1.

If your margin balance is between $2,000 (exc.) and $20,000 (inc.), you can set leverage to 10:1, 5:1, 2.5:1 and 1:1.

If your margin balance is greater than $20,000 (exc.), you can set leverage to 50:1, 10:1, 5:1, 2.5:1 and 1:1.


This is to protect our customers' interest and maintain market volatility at low levels by preventing huge forced liquidations as much as possible. Also, less funds will be used up by large clients so we will have more available reserves.

Now, please vote!

I made some adjustments.  This works better.

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January 18, 2012, 03:15:32 AM
 #13

I believe that people with large accounts will generally vote for "disagree" since they are the impacted ones.

So they should read your proposition as following:
"I, Zhoutong, decide to take money from your current positions
under the cover of "democracy" label"
payb.tc
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January 18, 2012, 03:19:20 AM
 #14

Currently, even 2.5:1 for a huge account is a lot of leverage! $20,000 will get you $50,000 tradable balance.

a lot..

put $20,000 into real fx on oanda.com and you'll get a million-dollar tradeable balance.

i say increase leverage, or leave it alone.

edit: i see pirate likes the idea of 50:1 also Smiley
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January 18, 2012, 03:21:15 AM
 #15

This all adds up to 5 to 1 on avg for everyone..


I fail to see how this will help volatility.

Is not a delayed liquidation one way to go ? albeit hard

The liquidations happen because of the faux liquid market you are building here..

On further thought, its more like 4 to 1 levy for everyone

Liquidations happen because irrational people overleverage.  There is a big warning about this when they sign up.  I was long 100 BTC during the drop, but I still had enough margin to buy 50@$5.15 before it recovered.  I'm back in the green already.

If you don't like bitcoinica, fine, but let those of us who use it communicate with Zhoutong instead of slinging insults.

https://www.bitcoin.org/bitcoin.pdf
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cottoneyeJoe
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January 18, 2012, 03:22:03 AM
 #16

I believe that people with large accounts will generally vote for "disagree" since they are the impacted ones.

However, we hope everyone can understand for each other, even at the free market.

Oh! How noble of the great zoutong! "For each other" and "free market" in the same sentence. Still trying to parse.

I dunno, personally I think things like leverage and usury are not really "for each other". Also, how about leverage being based on how much capital you ACTUALLY hold in reserve? Seems like the heritage of bitcoin is not keen on fractional reserve.
pirateat40
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January 18, 2012, 03:24:18 AM
 #17

Exactly.  Don't change the system because people don't know what they are doing.  We all are aware of the risks and this should be a lesson to those that overextended themselves. Unless this is something Bitcoinica needs to do to be profitable, leave it alone or move up and onward.

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January 18, 2012, 03:24:32 AM
 #18

lower max trade to 10BTC and raise leverage to 100:1. You just want gamblers not institutional traders.

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January 18, 2012, 03:27:21 AM
 #19

I believe that people with large accounts will generally vote for "disagree" since they are the impacted ones.

However, we hope everyone can understand for each other, even at the free market.

Oh! How noble of the great zoutong! "For each other" and "free market" in the same sentence. Still trying to parse.

I dunno, personally I think things like leverage and usury are not really "for each other". Also, how about leverage being based on how much capital you ACTUALLY hold in reserve? Seems like the heritage of bitcoin is not keen on fractional reserve.

1.  There is no interest on loans... thus no usery.
2.  Allowing others people to take responsibility for as much risk as they want is very "free market".  Restricting this when it's possible is not.

I trade on leverage, I was long, I didn't get liquidated.  I've taken big losses before and I'm willing to accept losses again if I make a bad call.

https://www.bitcoin.org/bitcoin.pdf
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notme
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January 18, 2012, 03:27:48 AM
 #20

lower max trade to 10BTC and raise leverage to 100:1. You just want gamblers not institutional traders.

if you don't trade on Bitcoinica please leave this discussion to those who do.

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
12jh3odyAAaR2XedPKZNCR4X4sebuotQzN
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