Silk Road forums
Support => Customer support => Topic started by: workforit69 on April 26, 2013, 11:05 pm
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In the past your btc quotes on sr matched up exactly with the current price in the marketplace . Last month i noticed your quote was considerably lower than the spot rate in the market but shrugged it off as a one off. I lost about 30$ in that transaction though because of that.
So today i jumped on to make a quick buy during this sale and saw that your quote was more than 4 bucks lower than the spot rate again. Not only would i lose out on this transaction but i'm now short the exact amount you guys are misquoting the exchange.
Please let me know what's going on....
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SR uses the 24 hour Mt Gox Average rate.
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SR uses the 24 hour Mt Gox Average rate.
Has this always been the case or i am just noticing it now due to all the volatility?
Also can you explain to me how how you guys are handling vendors that hedge. According to your wki as soon as btc is put in escrow the btc is exchanged for dollars. How does this not affect you if you are using the average?
Finally are you guys planning on updating your policy to better reflect the btc marketplace?
Thanks.
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It has always been the case and yes given the recent worse than usual volatility of the btc price it is probably making it more apparent.
The SR wiki describes hedging in detail, I'm not sure what you are asking when you say "can you explain to me how how you guys are handling vendors that hedge"??
Neither scout nor I speak for DPR re SR policy, you would need to ask them if they were considering any changes.
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I'm not sure I understand the question either. Vendors are allowed to hedge their listings, and hedging is explained in detail here in the wiki:
http://dkn255hz262ypmii.onion/wiki/index.php?title=Buyer%27s_Guide#Escrow_hedge
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I'm not sure I understand the question either. Vendors are allowed to hedge their listings, and hedging is explained in detail here in the wiki:
http://dkn255hz262ypmii.onion/wiki/index.php?title=Buyer%27s_Guide#Escrow_hedge
So for example lets say a vendor puts up an item and wants to receive dollar amount $100. You guys then go calculate how many btc that will costs a buyer using the daily avg rate.. Lets say the rate is 100$ per coin so the costs is listed as 1btc.
Now i go into the mt.gox and see the spot rate is down dramatically on the day and is trading at $50 per coin. I go ahead and purchase 1btc @ 50 and transfer it over to SR.
I complete my transaction and then you guys take that 1btc i just paid and go to the marketplace to presumably get the dealer his asking price of $100. You take that 1btc and only get 50$ due to the difference in the rate you guys have listed and what is the real price in the marketplace.
Please explain how this is handled.
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The issue with big differences in 24 hour average rate and the spot rate are not that common, I know recently SR had it's rate at a much higher than the market rate for a few short periods recently when the price of BTC dramatically dropped.
For the market to be stable (ish) hedging is a necessity to even out some of the volatility, to protect the vendor and the buyer from big variations. This is why SR charges hedging fees on all sales so that money essentially funds an insurance against what you have just described. When the price of BTC is going up those hedged funds are making SR a lot of money as only the dollar value is released to the vendor, not the amount of coins. However when things swing in the other direction as they did recently that pot of money would have been used to offset the potential loses.