Traders on cryptocurrency exchanges like Poloniex sometimes want to trade on margin. You can earn interest by lending your bitcoin and other cryptocurrencies to these traders. Read our primer on margin lending for more.
Exchanges like Poloniex set limits on trader losses so that you’re protected from losing your coins. Poloniex holds a reserve requirement and forces liquidation of positions if the trader is at risk of defaulting on margin. While margin lending is safe, you should be aware of the risks, as with any investment. You can read more about the details of Poloniex margin trading on Poloniex.
You may lend out your coins on cryptocurrency exchanges that offers margin lending and margin trading. Blendingbot helps you lend out your coins on the Poloniex exchange (more exchanges to come soon).
We can connect to your Poloniex account if your share your Poloniex API keys with us. This will allow us to offer loans on your behalf. For instructions on connecting your Poloniex account, check out the Setup Guide.
The demand side of Poloniex's margin lending market is deceptive. There is a lot of demand for margin loans on Poloniex, but this demand does not actually show up on the Poloniex Loan Demands box. This is because margin traders will usually take a loan that's being offered rather than put out their own demand orders for loans. The margin loan market on Poloniex is very liquid, and your loans offers will usually be taken very quickly.
We make your coins work harder and more intelligently so you generate more profits. Loans on Poloniex can be split up into many smaller loans that can be returned at any time, making manual lending very difficult. We make sure your coins are always automatically re-issued if they are returned so that you're never losing out on interest and no coins ever sit idle. We price loan offers better by considering order depth, velocity, and likelihood of order fills to ensure that we're always offering at the most profitable rates.
You don't want to use Poloniex's auto-renew option for your loans because rates can fluctuate quickly. Always offering loans at the same rate is suboptimal.
We price loans to maximize your expected profit. High priced loans mean higher returns, but high rates also mean your offer is less likely to be taken, causing your coins to sit idle. Interest rates also fluctuate quickly and often, so pricing to simply match current market rates is naive. Furthermore, other traders may try to manipulate the prices in the market by flooding the order book with small bogus orders in attempts to influence the offers of less sophisticated bots. Blendingbot prices our rates with all of these factors in consideration to generate the highest possible interest.
For instructions on connecting your Poloniex account, check out the Setup Guide.
For details about our fees, take a look at our pricing.