How Bitfinex Lending Interest Works: Formula, Payouts, Fees
Contents
Bitfinex lending interest accrues by the second and is paid once a day, and what you receive is net of Bitfinex's fee. Here's the calculation, using the formula from Bitfinex's documentation.
The official formula
Interest paid to the lender:
amount × (rate ÷ 100) × (seconds ÷ 86,400) × 0.85
The rate is the daily rate in percent, seconds is how long the money was actually lent out, and the 0.85 at the end is what's left after the 15% fee.
Two examples
Lend 1,000 USD at 0.03% a day for a full day: 1,000 × 0.0003 × 1 × 0.85 = 0.255 USD.
The same loan repaid after 6 hours: 1,000 × 0.0003 × 0.25 × 0.85, or about 0.064 USD.
The fee: 15% or 18%
For a regular offer, Bitfinex keeps 15% of the interest. For a hidden offer (one that doesn't appear on the public funding book), it's 18%. Holding LEO tokens can reduce the fee; check Bitfinex's fee page for the current discount.
This fee goes to Bitfinex, and you pay it whether or not you use a lending tool.
When interest is paid
Interest is paid into your funding wallet once a day, around 01:30 UTC.
When a borrower repays early
A borrower who repays by hand pays at least one hour of interest. The lender gets that hour, minus the 15% fee. After the first hour, interest is counted by the second.
Why your daily interest keeps changing
- Borrowers repay early, and the gap between money coming back and going out again earns nothing.
- Every loan fills at a different rate, and old and new loans are mixed together.
- Loans at FRR or FRR Delta Variable change rate every hour along with FRR.
- Interest lands in your funding wallet and earns nothing until it's offered again.
From daily rate to real APR
The daily rate × 365 is the headline APR. Your real return is lower once you take out the fee and idle time.
For example, 0.03% a day is a 10.95% headline APR, or about 9.3% after the 15% fee. If the money sits idle a tenth of the time, you're down to roughly 8.4%.
When you compare lending tools, the APR after fees and idle time tells you more than the rates they offer at. For how FRR is calculated, see What is FRR.