Cryptocurrency lending is probably one of the smartest things you could be doing to grow your current position in a meaningful way with minimal risk. It can seem a bit daunting at first until you understand the following details.
What do I need to get started?
Account with Poloniex – holds your funds, provides a lending framework, and helps ensure loan payback.
Account with CoinFlow.io – Automates loan renewals at adjusting market rates to optimize your ROI.
What do I need to do to Setup Coinflow.io?
- Generate an API user on Poloniex
- Make sure your Poloniex Lending Account has BTC funds
- Signup at CoinFlow.io
- Copy & Paste the API Key and Secret into CoinFlow.io
- Transfer funds to CoinFlow.io to enable your account
Who am I loaning my funds to?
Users of Poloniex’s Margin Trading platform are taking advantage of your loans, in exchange for paying you an interest rate, to amplify their current account funds for their trades. The Poloniex platform lets Margin Traders take loans up to 2.5x of their account balance.
How do I know my loan will be paid back?
The Poloniex platform monitors user accounts taking loans and liquidates their current positions when market shifts jeopardize the user’s ability to pay back their loans. If this happens, your loans may be paid back early, but still paid back with your prorated amount of interest that you earned. Utilizing the CoinFlow.io lending bot will help ensure that your loans are then automatically renewed at the best rate possible to keep you earning interest.
What are the fees for lending?
Poloniex charges 15% of the total earned income as fees for lending. CoinFlow.io charges 10% of the remaining income as fees for automate the lending strategy.
What would happen during a fork?
Any potential blockchain fork, like the one we wrote about here, could result in the loss of a secondary set (the forked set) of coin. Only the wallets holding coin during the fork would result in owning a secondary set in the forked chain. Your original loan would still be paid back but you would only have coin in the original blockchain.
Could a Platform outage cause issues?
Yes, during a Poloniex outage, or high load times of either Poloniex or the related blockchain itself, delays and issues in transactions may tie up your funds from being managed. If this is something that concerns you can either remove your funds during high risk times or avoid lending.
Any CoinFlow.io stability issues would be minimally impacting since your funds would still be secure and stable, but loans may not be renewed during that time period.