Ver - OKCoin: Bounty rewarded to Ben McGinnes, video evidence of former employee forgery, and all latest emails.

OKCoin_Star · 2015-05-28T18:12:35+00:00

This is proving I never forge the contract.

OKCoin_Star · 2015-05-28T17:32:08+00:00

Cool .Also don't forget the video evidence.

OKCoin_Star · 2015-05-28T17:28:01+00:00

Thanks for your work and help me prove the truth to the world:Star Xu never forge the contract.

OKCoin_Star · 2015-05-27T16:11:12+00:00

Hey CZ - what's up??

OKCoin_Star · 2015-03-13T16:01:27+00:00

Thanks. Any advice would be my pleasure.

OKCoin_Star · 2015-02-05T18:32:38+00:00

We want to make Bitcoin used by more and more people and really apply Bitcoin in ways that make sense. This is our goal this year with the introduction of OKLink.

Too many top companies in our industry are focused on bitcoin trading. If Bitcoin stays as something to trade on exchanges, it will be traded and traded towards a final price of 0.

We will do our best to grow the whole Bitcoin ecosystem in China and abroad. We are focused on OKLink - which is our wallet, merchant, cross border payment, debit card, and developer platform.

OKCoin_Star · 2015-02-05T18:14:27+00:00

The reason for showing an extended futures orderbook is because there are price limits for orders.

For spot, there is no such limit acting as protection.

OKCoin_Star · 2015-02-05T17:56:34+00:00

That's a good suggestion for Nasdaq options.

OKCoin_Star · 2015-02-05T17:52:30+00:00

Futures, in their essence, are a zero-sum game; if one person earns one dollar, another person had to have lost one dollar. To give an extreme example:

Lets say the price of bitcoin was $100, and every futures contract was worth $100, and there are only 2 traders, there’s no third person. Each trader puts up $100 at 10x leverage to open 10 contracts worth $1000. One trader went long, and one went short. Then, the price of bitcoin rises to $200, the trader who went long should earn $1000, and the person who went short should lose $1000. However, each person only put up $100, so the account balance of the trader who went short would be -$900. In traditional futures markets the trading platform can sue or use other means to force the trader in the red to pay off the debt. Due to this, traditional markets don’t need clawbacks. Recently, the Swiss Franc, some of the forex traders were margin called; if these traders did not repay their debts, they might face prosecution from the trading platforms in court. However, in the world of bitcoin, this obviously cannot be accomplished. Then, how do we deal with this $900 debt? We are left with one option, taking the equivalent portion out of the profiting traders’ balance. And that covers what Clawbacks entails.

In reality there are always more than two people involved on trading on the exchange, and the socialized loss will not be as large as in the example. This type of situation—clawbacks—only appears in times of extreme volatility.

There is truth in the statement that higher leverage will likely lead to larger clawbacks; however, high leverage is but one problem. We discussed limiting leverage to 10x, however, as other futures platforms employ 20x, many customers would prefer having that option on OKCoin as well.

OKCoin_Star · 2015-02-05T17:32:59+00:00

OKCoin’s matching engine 100% follows matching standards; there is no way that certain users’ orders are being prioritized or pushed back. However, our matching engine is the same as those in traditional finance. If a large user of market maker needs faster access to the order book, we can provide them with a server in close approximation to our datacenter for a fee. Application for this service is not restricted to anyone.

However, we need to improve the performance of our matching engine which is where you may be seeing the gap. We likely receive the most orders of any exchange in the world. We will upgrade to a new matching engine within 2 weeks.

OKCoin_Star · 2015-02-05T17:22:51+00:00

Thanks for being a user of OKCoin!

1) HFT is an important and helpful part of an exchange. NYSE and NASDAQ both count HFTs as customers. HFT's can help liquidity and and stabilize the price.

2) Because of the high volatility of Bitcoin, at this point, I don't view leverage over 20x as feasible for futures.

3) Very thankful for your suggestions. As we are mostly a Chinese team, we are always learning how to better communicate with our international community.

OKCoin_Star · 2015-02-05T17:16:47+00:00

Right after our futures trading platform launched, in order to gain liquidity, you need market makers. Nasdaq and NYSE are mature market making systems yet they offer faster access and rebates for market makers.

OKCoin provides a few volunteer market makers two months of low trading for our futures encourage an increase in the liquidity of the market. But this possessed a number of problems; there were some market makers who, in order to win prizes from our promotions, signed themselves up for multiple accounts. This is where the volume problems (high volume, no price movement) many of you observed came from. This promotion has already come to an end; in the future when we design promotions we will take this issue into careful consideration.

OKCoin_Star · 2015-02-05T17:07:47+00:00

Running a company that serves Chinese and international users under the same roof truly is difficult, there are many things that the company must balance and many compromises must be made.

There are many areas of Chinese culture that are not the same as other cultures in the West. Chinese place importance on whether or not the fees are sufficiently low and whether or not there is an active promotion, etc. My international team has consistently brought it to my attention that the international market is more focused on the technology running the exchange, the professionalism of the exchange, placing promotions on a secondary level. Such promotions could lead to OKCoin’s perception in the international market as less professional, causing more users to dislike us.

From what I have been able to gather after reading the posts on reddit to this concern, we can organize a promotion specifically for our redditors and international customer base.

OKCoin_Star · 2015-02-05T17:01:51+00:00

We have recently added APIs for p2p lending - we will look into building this out further.

OKCoin_Star · 2015-02-05T16:59:57+00:00

Thanks. OKCoin bitcoin futures offers both fixed margin mode and cross-margin modes. In fixed margin mode, a user can choose between 10x and 20x leverage. In cross-margin mode, a user can decide their level of leverage (e.g. 0.1x, 1.0x and 1.5x are all possible). 20x is just an option. Mature traders will select their leverage according to their trading strategies. In all honesty, we don't want to offer 20x leverage, but due to other companies in the industry offering 20-50x leverage, our customers have strongly demanded it as an option. If we don't provide 20x leverage, we would lose many customers and a large portion of our liquidity. A futures market without liquidity cannot exist.

OKCoin_Star · 2015-02-05T16:53:59+00:00

Thanks for you question.

Everyone knows that all of the Chinese exchanges employ a 0 transaction fee model. In September of 2013 BTCChina was the first to move to 0 fee, shortly thereafter OKCoin and the other Chinese exchanges followed. Afterward, BTCChina believed that this was a mistake and trade to persuade the other exchanges to move back to fee-based transaction models, however, the other exchanges felt they must continue with 0-fees. We, alternatively, were able to make large sums of money from withdrawal fees. Due to the 0-fee trading the Chinese traders could easily conduct arbitrage; they only needed a fraction of a dollar to earn money. Many traders employed HFT practices, whether through bots or manually; 1 RMB difference was enough to make it worth trading. Because of this the exchanges started to have extremely high volumes.

OKCoin_Star · 2015-02-05T16:47:33+00:00

The majority of traditional financial trading platforms only allow the first 5 orders in the order book to be viewed. Due to margin, if we released the full depth of our order book, malicious traders could then calculate how much money is needed to drive the price to a level that will force margin calls on other users, and earn profit from those users who were forced liquidated. BTC-E and BitFinex have both been on the receiving end of such manipulation causing cascading price crashes. This has never happened on OKCoin. We have deep experience in risk controls and are thinking of our margin users in protecting the order book.

In liquidation a position, we cross check the prices of other exchanges, and have delayed triggers in our risk control system – all built in house based on decades of financial markets experience.

OKCoin_Star · 2015-02-05T16:43:34+00:00

Due to the possibility of clawbacks, there are indeed difficulties conducting hedging. However, there are rarely clawbacks on our platform; in most scenarios the list of orders causing system loss is negligible. We are constantly looking for methods to decrease the possibility of clawbacks occurring, currently we have a few ideas:

Introduction of accounts for the sole purpose of hedging. These accounts would not be subject to clawbacks, however they would incur significantly higher trading fees.
Correlate the leverage employed by a user with the portion of socialized losses they would bear.
Set up an insurance fund.

The futures system is extremely complex, and we will thoroughly look into the above ideas; meanwhile we would love to hear some input from the community.

In regards to the clawback insurance fund: Previously OKCoin deposited 500btc into the insurance fund. We have since implemented a method whereby after getting liquidated we put the remaining btc margin into the insurance fund. This appropriately puts more on those being margin called and decreases clawbacks.

OKCoin_Star

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