Topic: Lend your doges @ 5% (Poloniex) (Read 801 times)

He can't lose everything because he would be margin called first and you get your BTC back..

Margin trading is for insiders and suckers.
http://www.marketwatch.com/story/why-you-should-never-short-sell-stocks-2015-11-19

If you have not received insider info (which is illegal by the way),
then you are a sucker and will learn the below term very quickly.

https://bitsharestalk.org/index.php?topic=17141.0

 

You use the usual metrics 'round here: your hopes, your dreams and your personal crystal ball.

Ah cool thanks. Would be nice to see some default-rate statistics in the past. It seems like you'd be flying blind without knowing that information. How would you determine what a 'safe' lending rate is, if you don't know the default rate?

Yeah, It's really low 0.0x%

As far as I know, the counterparty risk is with the borrower. Poloniex just makes it less unsafe by enforcing liquidation buys is the short seller's margin (value of the borrowed coins over and above the loan value) gets too low.

I'm afraid I don't know the minimum, but I can explain the loan market. Poloniex now allows short selling for certain high-volume coins. A short sale, or forward sale, consists of borrowing someone's coins, selling them on the market, buying them back later and paying back the loan. This technique is only profitable if the coin drops, allowing the short seller to buy-back his borrow at a low enough price to pay the interest and leave him with a profit.

Just as the object of a trading purchase is to buy low and sell high, the object of a short sale is to sell high and buy low.

If you loan your DOGEs in that loan market, you're offering a short seller the use of your DOGEs for a time at the agreed-upon rate of interest. They'll be sold and the short seller will pay you back + interest when he buys back the coins he borrowed from you ("covers his short") Interestingly, the lender to a short seller is essentially making a bullish bet. If the shorter loses by "selling high and buying back higher", the lender get the interest plus a capital gain. But on the other hand, a successful shorter pays back coins that are worth less.

Is the default risk taken by Poloniex or the lender? In other words, if the person who borrowed from me went on to lose everything, does Poloniex pay me back or am I out of luck?

5% per day? You are wrong: it`s 0.02% per day.

Check this: https://bitcointalksearch.org/topic/m.14491771

Currently...

Rate   Amount (DOGE)   Duration
0.0394%   216.34920830   2 Days
0.0394%   711.80050713   2 Days
0.0396%   1423.60101426   2 Days
0.0397%   25414.22907863   2 Days
0.0397%   100015.61662747   2 Days
0.0398%   379868.41600520   2-20 Days
0.0399%   63.14079803   2 Days
0.0400%   1131996.45052331   2-4 Days
0.0400%   1997886.96170853   2-60 Days
0.0402%   289.10814541   2 Days
0.0403%   235955.38831008   2 Days
0.0405%   1000.00000000   2 Days
0.0410%   46.83316814   2 Days
0.0415%   74.89002605   2 Days
0.0416%   25.09874572   2 Days
0.0420%   507.79367418   2 Days
0.0423%   72.50927395   2 Days
0.0424%   1000.00000000   2 Days
0.0425%   2.10509582   2 Days
0.0430%   1000.03350673   2 Days
0.0440%   2756.83224244   2 Days
0.0460%   1000.00000000   2 Days
0.0465%   0.01012802   2 Days
0.0479%   50782.89519581   2 Days
0.0496%   49.10117404   2 Days
0.0497%   2041.58342392   2 Days
0.0499%   11000.00000000   2 Days
0.0500%   119907.86860245   2-30 Days
0.0598%   833494.18217367   2 Days
0.0599%   50000.00000000   2 Days
0.0600%   5000.00000000   5 Days
0.0690%   2025.01852571   2 Days
0.0700%   105001.89873418   2-7 Days
0.0750%   11144.00985032   2 Days
0.0789%   37.15842298   2 Days
0.0791%   382721.78716635   2 Days
0.0800%   105038.05748977   2-7 Days
0.0839%   478300.23435660   2 Days
0.0846%   393573.21170282   8 Days
0.0848%   7347.69731572   2-10 Days
0.0849%   11501.08354387   2 Days
0.0850%   1806399.24894611   2 Days
0.0888%   41.61823108   2 Days
0.0900%   1583618.03009215   2 Days
0.3000%   64638.00000000   2 Days
0.7960%   23444.00000000   55 Days
0.8000%   99775.00000000   2 Days
0.8689%   4843.95504176   2 Days
0.8690%   955778.96559814   2 Days
0.8810%   13972.58992624   30 Days
0.8820%   200000.00000000   30 Days
Load More

Can you explain a bit more to a newbie and what is the minimum?

Margin loans. Essentially, you're lending to short sellers.

How does it works?

To all longterm Doge holder, you can get up to 5% per day at the moment for lending your doges on Poloniex