Hello, i've use poloniex for months but i never actually use the lending section
Other than risk of Poloniex goes down/hacked, is there any other risk that implied if i lent to the user?
Next, other then polo, is there any othere simlar lending site?
Good question, one thing I"m wondering is how is your loan secured say you lend 1BTC and the person who borrowed the 1BTC they just drop of the Earth, is your 1BTC secured? How does that work?
Just wondering.
Thanks.
Hi,
When you are a margin trader on Poloniex you need enough funds available for lending. So when you borrow 1 BTC you need enough altcoins to cover not only the 1 BTC you want to lend, but some extra.
When your trades are going badly, or yours coins are dropping fast in value, Poloniex starts a forced liquidation of the funds of the margin trader, to be sure the lender will receive the money back. This normally will cover the lend amount. Only when there is an extremely fast dropping coin used as collateral there is a small chance you will loose part of your lend coins, but AFAIK this never happened.
So you already mentioned the biggest risk: insolvency of Poloniex.
