Warning: Do Not Lend On Poloniex


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This is a must read for bitcoin users. Poloniex allows you to lend bitcoins to others trading on margin. In theory, Poloniex will try to protect you from losses by forcing a person to liquidate if they're taking a beating.

This is not true.

I've tested lending one bitcoin over the last two weeks. That one bitcoin has gone from one bitcoin to .81 bitcoins now. That's a two week loss of 0.19 bitcoins. If I kept lending for a full year, I would have 0 remaining of the bitcoin at that rate.

Interest rates must reflect the risk associated with lending and Poloniex's users don't seem to get this. In addition, due to these losses and how quickly they've piled up, Poloniex needs to re-evaluate cutting a margin traders losses much earlier. Make no mistake: Poloniex still gets their fee, while I got the loss.

It was a good experiment, but DO NOT lend bitcoins on Poloniex. The interest rates do not reflect the risk. In order to offset losses, interest rates should be over 150%.

Spread this to anyone considering lending their bitcoins – they will lose in time.

submitted by /u/seemqueues
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247 BTC

Bitcoin News Search

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