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RE: Do you lend out bitcoins on Poloniex? Please share your experiences!
I was using poloniexlendingboot.com but it's no longer available.
You have to open manually and you pick your interest rate; if someone accepts it you have a deal. The rate is variable; it is a market there and it's better to have a bot to scan and update your offers to be always on top.
The rate of 2% is from time to time, when the demand is high. In realty you will get to yearly rates of about 7-10% if you are using a bot,otherwise it will be lower.
I see, thanks. So how does it work, can the other person decide not to pay you back, or does he have to leave a deposit? In which cases is your money lost? Will it be lost completely, or is it also possible to lose a part of the money you lended out?
Poloniex offers the margin trading option. People who wants to trade more than they afford can borrow those coins. For example let's say I want to buy eth and I have only 0.5 btc. But I want to buy 10 eth and I need 0.5 extra btc.
I pick a rate and if poloniex can find the money at that rate they are borrowed automatically.
On the other side you offer some money for lending. Poloniex picks for me the money with the lowest interest rate. This is why you always want to have the best deal.
You can not lose the money. Any margin trading is automatically closed to make sure the money are returned(if I brought 10 eth for 1 btc out of each 0.5 btc are borrowed and the eth price drop to half then the 10 eth are automatically sold for 0.5 btc(+interest) )
The rate is variable. For example let's say yesterday many people wanted to buy eth because it's price was low. In such scenarios you could earn 5% in 2 days but those are exceptions.
Thanks for the explanation. But if there is no risk, then why doesn't everybody do this all the time? It seems not many people do this yet.. 2% per day can be up to 360% per year, I can't imagine it's without risk...are you sure?
It not 2% per day. It can get even to 5% per day. But not every day, only some days.
Let's say btc went from 2000 to 3000 and I'm sure it will go down. I want to sell a few BTC for eth but I don't have enough BTC. So I go and sell some which I don't have(borrowing them). But I'm not the only one, everyone want to sell some btc for a quick profit. So the interest rate can jump from 0.001% per day to 5% per day. Does't matter, I know I'll make a quick buck, I'll pay 5%. I borrow, I sell the bitcoins when is 3000(for 10 eth) and after 2 hours I buy them back for 2400(with 8 eth). You get the money back plus the interest rate(5% per day means 5%/12 for 2 hours) while I get 2 eth.
Normally the interest rate is something like 0.006% for bitcoins and even lower for other coins. If you lend the money you do it for 2 days so yo block the coins for 2 days. The interest rate can go up for a few hours and then it goes back and if you have them already lent you can not profit of that high interest rate.
If you plan to hold some money for a while, you can make 5-10% per year if you're using a lending bot. Otherwise you'll get less than that.
Ok, thanks for explaining, I'm gonna try it out.