Crypto lender BlockFi is partnering with an unbiased crypto pricing supplier to worth buyer deposits and collateral.
CF Benchmarks will worth prospects’ property primarily based on knowledge it has sourced from 5 crypto exchanges which have handed the standards in its methodology for pricing crypto: Bitstamp, Coinbase, Kraken, Gemini and itBit.
“You may see different suppliers out there that function exchanges and use the change for pricing however it may not be a sign of the place the precise worth is and the place the liquidity is,” David Olsson, BlockFi’s world managing director of European and Asian markets, mentioned in an interview.
CF Benchmarks’ indices replace each second versus the 5 or 15 seconds at different index suppliers, CF Benchmarks CEO Sui Chung mentioned. Previous to including CF Benchmarks, BlockFi was in a position to seize knowledge a number of occasions a minute, mentioned Olsson.
“By way of danger, let’s say with a five-second index … for those who attempt to liquidate the mortgage when the market is shifting in a short time, it’s possible you’ll miss the boat and by the point you’ve managed to liquidate, you’re really in detrimental fairness,” Chung mentioned.
As a result of bitcoin is an asset that may transfer in clips of lots of of {dollars} per second, capturing worth knowledge permits BlockFi to hedge towards flash crashes extra effectively, Olsson added.