Use Poloniex with Lending Bot to earn bitcoins and altcoins - Buy Bitcoins News profitable bitcoin Mining

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  • Use Poloniex with Lending Bot to earn bitcoins and altcoins


    INTRODUCTION TO LOANS IN POLONIEX


    FOR A WHILE I HAVE BEEN RESEARCHING A NEW SERVICE CALLED LENDING BOT  FOR THE PEER-TO-PEER MARGIN LOAN MARKET IN POLONIEX .

    IF YOU ARE NOT FAMILIAR WITH POLONIEX , THIS PAGE OFFERS YOU A  "COMMERCIAL MARGIN" FUNCTION , WHERE TRADERS USE LOANS TO LEVERAGE THEIR LONG OR SHORT POSITIONS. FOR EXAMPLE, USING TEN TIMES THE LEVERAGE  WHEN THE MARKET MOVES ONLY 1% , THE TRADER WILL HAVE A GAIN OR LOSS OF 10% .

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    These loans are funded by a peer-to-peer market , in which other users are able to make loan offers and set their own requirements for the daily interest rate paid on all outstanding loans. There are risks associated with making a loan like this; The first of these risks is that the borrower will lose a transaction and will not be able to repay the loan.



    This is managed through a maintenance margin system that automatically closes the position of a trader before he can get close to losing all his guarantees. In the previous example on  leverage  x10 , a market movement of 8% could lead to a margin of  80% loss for a trader, at which time his position would be closed automatically (assuming a maintenance margin of 20% )

    This means that the borrower can only lose his own money and not the money he has borrowed, assuming that the maintenance margin provides enough space for his position to close before the losses go beyond the merchant's initial capital level .

    It remains a risk if the market moves very suddenly and substantially there are not enough open orders so that the exchange can close all the operations that have affected its maintenance margin, which would cause a loss for the lenders. You must keep your coins in exchange, while you use this service, which opens the possibility of a theft or fraud. Despite these risks, this is generally the safest form of peer-to-peer lending in cryptoconversion, and so far there have been no losses since Poloniex began offering this service.

    CONTENT

    MANAGING YOUR LOANS

    USING LENDING BOT

    POLONIEXLENDINGBOT.COM

    HOW MUCH CAN YOU WIN?


    MANAGING YOUR LOANS


    The big problem with using this market as a lender, is that the market rate for daily interest constantly changes, so it is very difficult to get a better commission.

    Manually managing loans effectively is almost impossible. The deals are usually divided into many small loans to different people, so you quickly find yourself with orders constantly expiring and new offers that need to be placed to keep your currencies in the market.

    To help you with this, Poloniex offers you an  "automatic renewal" feature , but it's far from ideal. If you set your loans to automatically renew at a high interest rate, you can spend a lot of time waiting for offers that are not being taken, but if you set it too low then you would be receiving less interest than you could be generating. There is simply no way to choose the best interest rate and then let it be done on its own, because the best rate to be able to select, is constantly changing.


    USING LENDING BOT


     Effective use of Lending Bot will allow you to  "auto-renew" at the current market rate rather than at a rate you have previously selected. The idea behind this is that you can make sure that your coins are always in active loans, while also ensuring you get the best available cost.

    This can be done using a program called bot that operates on a remote computer and agree to your account using the API of Poloniex .



    POLONIEXLENDINGBOT.COM

    This new service offers you an open source version of your bot  so you can use it for free, as long as you have a server to run it and the necessary skills to make it work (there is no support and it is not tested on different operating systems, configuration Hardware ups and so on, so this may prove to be difficult)

    It also offers a management service where you can run your bot on your servers, in exchange for a cut of 10% of the benefits you make through its use.

    Due to the way Poloniex has structured its API , this can be done in a totally reliable way. You can generate an API key (basically a password that the bot uses to access your account) that does not include negotiation permissions, so the bot can only manage the funds that you have transferred to your Poloniex loan account , from there There's a way they can steal your coins.

    The payment is accepted one month late, so after you have been running the bot for a month, you will be sent a bill that you must pay if you want to keep it running for the next month.


    HOW MUCH CAN YOU WIN?


    The amount of interest you earn depends on the loan market and can not be predicted in advance.

    Before using this bot , I have been making loans at Poloniex for several months through automatic renewal with some manual management. I will keep my eye on my account as long as I can, to cancel and replace orders that are not being completed. During that time the average interest rates may be equivalent to around 20% - 30% annually (including the compound) , or maybe a little more when taking into account the strange temporary increase of up to 1% - 2%  up to date.

    Because I was not always getting the best rate, and also because my coins were not always borrowed, I would estimate that you can actually earn around 60% - 70%  for this. Since I started using Lending Bot to get the best possible interest in my bitcoins and other altcoins, I estimate that I have generated more than 90% - 95% of the average market rate.

    My conclusion: even after paying the 10% fee, I seem to have been earning more interest by using the bot than the use of  automatic renewal . If this is your case, it also depends on how actively you are able to manage your account and how volatile the loan rate is in the future. I have also considered that the risk / reward factorof lending in general at Poloniex , are much better than any other form of peer-to-peer loanfor Bitcoin.

    I have taken a brief step in peer-to-peer loans for personal and business loans, testing multiple different sites, but ended up losing more for defaults than for interest earnings on each site I've considered trying out. Personally, I recommend giving Lending Bot a chance to study it and be willing to take some risk in order to increase your Bitcoin piggy bank with interest payments every day.

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