Don't lend more than you poloniex afford to lose. Use of this site constitutes acceptance of our User Agreement and Privacy Policy. I expect that there are good protections in place to make the system work, I just wanna know what they are lending how it works. I tried reading the FAQ on poloniex but there's not much info there, so I'd like to faqc a few questions about lending on faqc. Pin Poloniex on Pinterest. Lending week I did some research on lending Bitcoins to earn interest.
Posts that are solely comprised of memes, irrelevant youtube videos or similar will be removed. These loans are only used for margin trading. What are the costs for this service? However, if the market changes and people no longer want to pay such a high fee to borrow Bitcoins, then your open trade to lend Bitcoins will sit there unfilled. I want to know your progress, I have put your blog in my RSS feed. One is something happening to the exchange itself.
Also, those prices to liquidation faqc suddenly a lot closer than they lending were. So just stumbled across this recently. Poloniex have faqc decide for yourself if you think the interest lending weighs up against the risks. Calling out other users for breaking our rules is poloniex allowed. Currently rates seem to be around 0.
So just stumbled across this recently. Hero Member Offline Posts: Trade CFD's with Bitcoin https: Hero Member Offline Activity: Let Uncle Pegasus dispense some priceless wisdom. People are going to get so excited that they can buy on margin, so when they see a coin ahem, ETH go up and up they will naturally think, "Gee Then the price of ETH will go up. Suddenly, the price will stall slightly. Now, the first borrower has a comfortable liquidation margin to the point where it's not even an issue.
Well, let me just fire a few more margin bullets at this problem and "help the cause". Others will follow suit, all doing their part to keep the price of ETH on the uptrend because they are all margined to the hilt in this thing together now.
All of them are pumping ETH hard because they all know they have a lot to lose now. Also, those prices to liquidation are suddenly a lot closer than they once were. The air of enthusiasm suddenly takes on a slightly desperate edge. Then the price of ETH goes up. But nothing can go up forever. Eventually someone will take profit. Eventually one man in the madness will say, "Ok, enough.
Let me get the fuck out of here before this shit goes iceberg. The most margined-to-the-hilt fool is hit first. His entire account is liquidated and sold off to meet the demands of those he owes. Supply will outstrip demand, especially at these inflated prices. Also, you would need to determine the interest rate for the loans. If the interest rate goes up after you've loaned out your funds, you could have potentially made more. We use an algorithm based on statistical analysis and current order book data to determine optimal interest rates.
Borrowers don't have the option to not repay the loan. The systems on Poloniex and Bitfinex enforce this. Margin traders cannot withdraw borrowed funds from the exchange.
By engaging in margin trading they essentially create a 'contract' where they are exposed to the price fluctuations. The loan never takes longer than the approved upon time. Margin traders can return the loan before the end of the loan.
Yes, there are risks. The risks are mainly associated with having your funds on an exchange. The exchange could be hacked or be ceased. Another risk is that during a loan the currency you're lending in can depreciate in value.
During the time of the loan normally 2 days you have no option to sell the currency. A rare event can also occur where a sudden strong price fluctuation, combined with too little market liquidity causes that the collateral of the borrower does not prove sufficient to repay the loan. Poloniex and Bitfinex have safeguards against this by maintaining a certain 'safety buffer'.
Until now this event hasn't occurred, however that does not provide a guarantee for the future. You have to decide for yourself if you think the interest rate weighs up against the risks. Don't lend more than you can afford to lose.
Since you are the main beneficiary of these loans, you are also the main bearer of the risk. We do not assume any responsibility if funds are lost.
More information can be found here. It depends on the rates and your personal situation. Bitfinex verification is not required so you can start lending as soon as you have funds deposited on your Bitfinex account. At Poloniex you need to go through verification but this should only take a few minutes.
Rates fluctuate constantly and vary depending on supply and demand for each cryptocurrency.