Poloniex Lending Bot

Poloniex Lending Bot

Poloniex Lending Bot gives you the opportunity to participate in a hands-off approach in peer-to-peer margin lending on Poloniex. This system automates the lending of coins.

SWOT review of Poloniex Lending Bot

Strengths

  • You can earn a passive income in Bitcoin or other coins by lending any of your coins on Poloniex via this bot.
  • Currently, these are the crypto coins which are being lent on Poloniex and Poloniex lending bot will lend these coins automatically for you.

 

 BTC Bitcoin
 CLAM Clam coin
 XMR Monero
 DOGE Doge Coin
 ETH Etherum
 XRP Ripple
 FCT Factom
 MAID MaidSafeCoin
 DASH DashPay
 LTC LiteCoin
 BTS Bitshares
 STR Stellar Coin

 

  • The risk of defaults from marginal lending seems to be smaller than on other Bitcoin lending sites such as BTCPOP or BitBond, but the returns are also smaller.
  • Manually lending on Poloniex is a very time intensive task.

Weaknesses

  • The fee is of 10% on the interest earned. This has to be paid on top 15% lending fee for  Poloniex.
  • Support seems to be slow.
  • It seems that Poloniex lending is plagued with stuffing on the platforms, with bots trying to reduce rates. While this is not related to the lending bot, it does lower the lending rates.
  • Potentially there are other ways to earn more money such as vDice which is an Altcoin which produces a yield.
  • If you expect the crypt-currency to fall in value, it is better to sell it rather than lend it.

Opportunities

  • When the speculators on Poloniex require more of a particular coin to speculate lending rates / Bitcoin and Altcoin Interest rates go up.
  • When using Poloniex Lending Bot,  you have some form of custody over your funds, as it is impossible for the borrowed funds to leave the platform. This is unlike other Bitcoin lending sites, where the Bitcoin leaves the platform, and its return depends on the borrower. In this case, the borrower is not permitted to sell the lent coins.
  • Bitcoin lending rates fluctuate by the second. However, they are frequently above the 10% APR, the rates for other coins tend to be lower.
  • You need to wait until the full maturity of the loan to access the money unless the borrower cancels it.
  • The power of compound interest.

 

Threats

There are three main threats:

1) Poloniex Related

  • Poloniex could be hacked in fact on 4th March 2014 Poloniex lost 12.3% of its total bitcoin supply in an attack.
  • If your coins are lent, and a fork takes place you do not acquire coins in the new fork. This has happened in the first Ethereum fork (DAO fiasco), and unfortunately, Poloniex did not inform it’s clients about this beforehand.
  • The exchange could suffer an outage, and this disrupts the crypto eco system. The impact of this would be margin traders could become insolvent. They could lose all the collateral and the borrowed funds.

2) Poloniex Lending bot related

  • If the system is hacked, they could set the lending rates to zero, in addition to exposing your email and password

3) Bitcoin and Altcoin related

  • The value of Bitcoin and Altcoins fluctuates. If you determine profits in another currency than bitcoin, your profits could be less even though you have made a profit.

  • DM F

    hey Jim, good article. I’ve used Poloniex lending Bot, and I was satisfied with it. Recently I started using Poloniex automatic Lending, their rate is smaller (8.5%) … aaand they have a referral program :), check it out: http://poloniexautomaticlending.com?refxc=147792

    cheers