[FI Thread]

This thread summarises what’s happened over the last 4 months, what went wrong, what FI could have done differently, and what they need to do now. It will be interesting to see which route they take!

#footballindex

Fundamentally, money in existing holds was needed to replace the liquidity provided by instant sell. FI were probably relying solely on new money to fill this gap, and it worked when buy bids were first introduced. Greenwood and Foden had their mega rises along with many (1/10)

other players. Why were people encouraged to hit market buy? Why didn’t people just undercut with a bid? They tried, but demand exceeded supply, and bids approached market price to the point that they pretty much matched. Once some people started hitting the blue button (2/10)

it became fastest finger first. Unfortunately, FI didn’t have sell offers ready at that point, so liquidity dried up. Sentiment plummeted and the market stopped growing. They then introduced sell offers, and surprise surprise the liquidity isn’t there. A proportion of the (3/10)

money in existing holds (~5%) had to be released to replace the liquidity provided by instant sell. Without new money coming in to the market, offer prices began to drop and the downward spiral began. FI were confident they’d countered this - with double dividends the value(4/10)

is immense. The thing they failed to foresee is that the negative sentiment at the start of a downturn outweighed the incentive of increased value. There are enough traders in the market that simply don’t ‘get it’. As soon as you have even 1% of traders willing to exit at (5/10)

virtually any price in a bear market, bad things are going to happen.

However, there was one way FI could have saved the situation. Recognising sentiment was low, and liquidity likewise, they could have provided short term liquidity themselves. This could have been in the(6/10)

form of external Market Makers, specifically instructed to provide liquidity where needed or it could have been FI themselves playing market maker to manually buy up offers where they saw fit.

Unfortunately, they’ve done neither as of now, and I’m not sure why. Yes they (7/10)

can let things rectify themselves organically. Value will always triumph sentiment. But the longer they leave things the worse the damage to the reputation of the platform. My current theory would be that they’re waiting until the 16th for the 2nd deposit bonus window, (8/10)

at which point they (or a market maker) will start buying up silly offers to kickstart a proper sentiment shift.

In summary, FI can take a fair amount of blame for the current situation. They shouldn’t have introduced order books into a flat, low sentiment market without (9/10)

visible market depth and sufficient market making in place to replace instant sell.

However, once people trust the mechanics and see failsafes in place, sentiment will rise and we’ll be back to normal. Value will always trump sentiment. It’s just a matter of time.

End (10/10)