Is the lending section of Poloniex risk free

[XERES]

one of the three main headers is lending, where you can give your btc to other traders under a loan basis, is this risk free ?
what happens if they fault on the loan?

[X-ray]

I think just like other lending service it has risk. The borrower could loss profit thus will not have enough coin to repay but I think poloniex does something to ensure that someone can repay regardless if the borrower did profit or not from the loan he got.

[jacee]

This might answer your question:

Although Poloniex takes several precautions to prevent a user from defaulting on a loan, the high volatility and substantial risk of illiquidity in markets means that Poloniex cannot make any guarantees against default. When you lend to other users using the Platform’s P2P lending system, you risk the loss of an unpaid principle if the borrower defaults on a loan and liquidation of the borrower's account fails to raise sufficient funds to cover his or her debt.

basically, it has risk since it depends on the person on how he is going to managed the borrowed coins in his trading.

[ronaldinho_07]

Any person to get a loan into the poloniex must put some coin into the margin trade,these funds works like colateral,if the person has no funds to repay the interest and the loan,the coin at margin trade will be sold and should cover the ammount lended,i didnt heard any history about no one get the money lended to other and the fee,the system proctects who lend since the person who aply cant withdraw any penie before pay the lending soo its 99% safe system but there is a risk.

[amacar2]

I think this thread better suite for service discussion board. However talking about lending i haven't tried this in polo but i am using polo for altcoin trading from start without any problem in deposit and withdrawl so they are trusted. But lending bitcoin to other users is quite risky (my personal view).

[crazyivan]

Lending s risk free, borrower cannot default on the loan since they have already deposit margin funds to cover any potential loss. However, it s an online transaction, there s always a risk of exchange going down, being hacked or similar.

[Bestwishes745]

lending any where has the same results. so you can give loan to a person, to those whom you know personally or who keep some collateral etc for that. It also depends on the faith of the person who ask for loan.

[ronaldinho_07]

Well in the past i were just trading altcoins with my bitcoins ,buying and selling till the day they offer the loan service and after a deep research its 99.9%safe to lend your bitcoins as no one can withdraw any cent before pay the loans,and to get a loan they need to put some coin into margin trade,that works like colateral,the usually interest is under 0,05% but these days with market of altcoins hot,being eth one of the involved the interest has achieve 1% and above .

[CrimBit]

Lending s risk free, borrower cannot default on the loan since they have already deposit margin funds to cover any potential loss. However, it s an online transaction, there s always a risk of exchange going down, being hacked or similar.

so the risk come only from poloniex..? before it i try this feature i want to ask, when lender can get his money back..? any chance we can take his money when he need..? maybe after 1hours

[Regionit]

Lending s risk free, borrower cannot default on the loan since they have already deposit margin funds to cover any potential loss. However, it s an online transaction, there s always a risk of exchange going down, being hacked or similar.

If the borrow bought a very illiquid coin and the price dropped 70% in one go, then Poloniex might not react fast enough to sell the coins.

[lemipawa]

I havent tried the lending or borrowing from poloniex but I think thier investment with lending bitcoins to polonix users are secured with the altcoins stored in poloniex by the borrower. Just like in the lending section in this forum, collateral can be alts that borrowers dont want to let go.

[crazyivan]

Lending s risk free, borrower cannot default on the loan since they have already deposit margin funds to cover any potential loss. However, it s an online transaction, there s always a risk of exchange going down, being hacked or similar.

so the risk come only from poloniex..? before it i try this feature i want to ask, when lender can get his money back..? any chance we can take his money when he need..? maybe after 1hours

Dont understand the question quite. The lender can close the loan whenever he wants, even after 5 minutes. Then you have to try to lend it again.

[NorthPixel]

I havent tried the lending or borrowing from poloniex but I think thier investment with lending bitcoins to polonix users are secured with the altcoins stored in poloniex by the borrower. Just like in the lending section in this forum, collateral can be alts that borrowers dont want to let go.

The problem is that the collateral could drop 60% in value within a few seconds. The Poloniex might not have time to sell the altcoin and recover the bitcon for the lender.

[coinyard]

I havent tried the lending or borrowing from poloniex but I think thier investment with lending bitcoins to polonix users are secured with the altcoins stored in poloniex by the borrower. Just like in the lending section in this forum, collateral can be alts that borrowers dont want to let go.

The problem is that the collateral could drop 60% in value within a few seconds. The Poloniex might not have time to sell the altcoin and recover the bitcon for the lender.

Has this event happened in the history of the lending business of Poloniex? When the borrower borrow bitcoin, is there a restriction on what they can buy?

[clf99]

I havent tried the lending or borrowing from poloniex but I think thier investment with lending bitcoins to polonix users are secured with the altcoins stored in poloniex by the borrower. Just like in the lending section in this forum, collateral can be alts that borrowers dont want to let go.

The problem is that the collateral could drop 60% in value within a few seconds. The Poloniex might not have time to sell the altcoin and recover the bitcon for the lender.

Has this event happened in the history of the lending business of Poloniex? When the borrower borrow bitcoin, is there a restriction on what they can buy?

it has probably not.  however, it eventually will, with absolute certainty.  Recently it happened in the 'real' world with the swiss franc and some companies, like Interactive Brokers, had to eat a bunch of losses when the trader couldn't pay up.  When this happens, and it will, the question is whether Polo will eat it in order to have rep in the market or whether they will say 'too bad so sad'.

This might be years, but it must happen eventually.  It's a black swan kind of thing.  Markets always have this problem eventually.  It's just rare, so nobody prepares.  I'm not sure how you would actually.

[iTradeChips]

Well in the past i were just trading altcoins with my bitcoins ,buying and selling till the day they offer the loan service and after a deep research its 99.9%safe to lend your bitcoins as no one can withdraw any cent before pay the loans,and to get a loan they need to put some coin into margin trade,that works like colateral,the usually interest is under 0,05% but these days with market of altcoins hot,being eth one of the involved the interest has achieve 1% and above .

i got interested in poloniex when i saw their daily volume and the lending thing. when we say 1% interest rate is that per day or what?

[lumeire]

I havent tried the lending or borrowing from poloniex but I think thier investment with lending bitcoins to polonix users are secured with the altcoins stored in poloniex by the borrower. Just like in the lending section in this forum, collateral can be alts that borrowers dont want to let go.

The problem is that the collateral could drop 60% in value within a few seconds. The Poloniex might not have time to sell the altcoin and recover the bitcon for the lender.

Has this event happened in the history of the lending business of Poloniex? When the borrower borrow bitcoin, is there a restriction on what they can buy?

it has probably not.  however, it eventually will, with absolute certainty.  Recently it happened in the 'real' world with the swiss franc and some companies, like Interactive Brokers, had to eat a bunch of losses when the trader couldn't pay up.  When this happens, and it will, the question is whether Polo will eat it in order to have rep in the market or whether they will say 'too bad so sad'.

This might be years, but it must happen eventually.  It's a black swan kind of thing.  Markets always have this problem eventually.  It's just rare, so nobody prepares.  I'm not sure how you would actually.

In the end you just can't remove the risks can you. Well I'll give this lending on Polo a try. Nothing risked nothing gained IMO.

[crazyivan]

Well in the past i were just trading altcoins with my bitcoins ,buying and selling till the day they offer the loan service and after a deep research its 99.9%safe to lend your bitcoins as no one can withdraw any cent before pay the loans,and to get a loan they need to put some coin into margin trade,that works like colateral,the usually interest is under 0,05% but these days with market of altcoins hot,being eth one of the involved the interest has achieve 1% and above .

i got interested in poloniex when i saw their daily volume and the lending thing. when we say 1% interest rate is that per day or what?

Lending interest rate s dropping rapidly. As with everything else, good stuff get saturated fast. I expect Polo to get to the Bitfinex rates very soon.

[Pursuer]

one of the three main headers is lending, where you can give your btc to other traders under a loan basis, is this risk free ?
what happens if they fault on the loan?

everything has its own risks, you will never find something that has 0 risk.
besides ever since cryptsy I personally never trust any other exchanger at all, and although lending is performed peer to peer there is still risk of exchanger going down.
also the borrower can lost on his trades and be unable to pay back, all these risks are small but not zero.

[Qartada]

Well in the past i were just trading altcoins with my bitcoins ,buying and selling till the day they offer the loan service and after a deep research its 99.9%safe to lend your bitcoins as no one can withdraw any cent before pay the loans,and to get a loan they need to put some coin into margin trade,that works like colateral,the usually interest is under 0,05% but these days with market of altcoins hot,being eth one of the involved the interest has achieve 1% and above .

i got interested in poloniex when i saw their daily volume and the lending thing. when we say 1% interest rate is that per day or what?

It is per day interest.