Silk Road forums
Support => Customer support => Topic started by: treesplees1 on May 09, 2013, 10:03 pm
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Hey. I made a purchase from a vendor that was hedged. I understand that the hedge can work both ways. However, I purchased two listings from a seller each for 1.99 BTC. I received 1.50 BTC for each order when the vendor cancelled each order a couple of days later. Upon inquiring about the cancellation, I was informed that the vendor had some error when he was creating the listing and ended up with six listings. I am assuming he gained from the hedge since I lost money, but maybe I'm mistaken. Regardless, I lost around $100 from a technical issue and I was wondering if it's just an SOL situation. Thanks for your time.
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Hmm that seems excessive, the hedging fee is no way near that amount so I am unsure as to what may have happened in this instance. I would advise you to contact SR support on the main site and open a ticket outlining your situation.
By the way the vendor doesn't get the benefit from hedging if the value of BTC goes up either, just the dollar amount of the listing.
Just a thought, did you order have some sort of expensive shipping option?
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Thanks for the reply. I'll give it a shot. I don't recall the shipping being an exorbitant amount by the way. I think it was like .08 BTC or something.
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Hey. I made a purchase from a vendor that was hedged. I understand that the hedge can work both ways. However, I purchased two listings from a seller each for 1.99 BTC. I received 1.50 BTC for each order when the vendor cancelled each order a couple of days later. Upon inquiring about the cancellation, I was informed that the vendor had some error when he was creating the listing and ended up with six listings. I am assuming he gained from the hedge since I lost money, but maybe I'm mistaken. Regardless, I lost around $100 from a technical issue and I was wondering if it's just an SOL situation. Thanks for your time.
Hi treesplees1,
That is actually how the hedging system works.
http://dkn255hz262ypmii.onion/wiki/index.php?title=Buyer%27s_Guide#Escrow_hedge
You receive back the USD amount of a hedged order, not the amount of the original order in BTC. If the value of Bitcoin decreases you receive more BTC back than you spent in order to bring it up to the USD amount you originally paid.
On the flip side of that, if the value of Bitcoin increases you receive less BTC back than you spent in order to bring it down to the USD amount you originally paid.
The amount you receive back will always be ~4% less than what you originally paid due to the escrow hedging fee that all hedged orders incur.
Libertas
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Hey. Thanks for the reply Libertas. I figured that was how it worked. It just surprises me that the bitcoins' value would have risen enough to take .5 bitcoin from a 2 BTC purchase, regardless of the 4% fee. I put in a ticket to support but they haven't gotten to it yet. I'll let you know what they say.
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Hey. Thanks for the reply Libertas. I figured that was how it worked. It just surprises me that the bitcoins' value would have risen enough to take .5 bitcoin from a 2 BTC purchase, regardless of the 4% fee. I put in a ticket to support but they haven't gotten to it yet. I'll let you know what they say.
If you let me know Bitcoin's value at the time of you placing your order and it's value at the time of receiving your refund I'll be able to be better calculate the required rise in Bitcoin's value required to result in receiving 0.5 BTC less back than you originally paid.
Libertas
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Alright. I don't want to seem lazy or anything so I tried to estimate it. The date of purchase was May 4, 7:57 PM UTC for 1.99 BTC and the date of refund was May 6, 4:33 PM UTC for 1.5 BTC. I figured that I should have from worst case scenario gotten like 1.8 BTC back and I figured that BTC would have needed to rise to just under $150 for the refund I actually got. Let me know what you think. Thanks brother.
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As far as I can tell the price was roughly $113 when you placed the order and $121 when you received your refund. These values will be slightly off as Silk Road uses a 24 hour moving average to calculate Bitcoin's value on the site rather than hourly values.
1.99 BTC @ $113 = $224.87
1.50 BTC @ $121 = $181.50
Difference = $43.37
Hedging fee on $224.87 @ 4% = $8.99.
Note that this can be more, and can be less - from the Seller's Guide:
You can expect a loss of **about 4%** of your normal payment when using the escrow hedging feature. This is due to the fact that, both when hedging and unhedging, you will lose the bid-ask spread between the available orders that can be used to fill your hedging order.
However, we'll assume 4% for now.
$224.87 - $8.99 = $215.88
$215.88 / $181.50 = 1.189 (which is the difference between the two)
$113 * 1.189 = $134.357, which is the price Bitcoin would have to hit to result in a refund of 0.5 BTC less than you received. Bitcoin has not been at that price since May 1st. Again though, the calculations are certainly off a little due to the fact that Silk Road uses a 24 hour moving average.
Just two more questions that will help me determine what has occurred:
How much is the listing that you bought (in USD), including shipping?
And do you recall exactly how much your refund was in USD when you received it back?
Libertas