Quote from: btcdiggingmaster on May 01, 2017, 11:44:28 AM

Quote from: cryptogear on April 05, 2017, 04:26:42 PM

Is this stuff working on Polo? I mean you can safely invest you money in lending? What happens if somebody defaults a loan? Is there a required collateral ammount in other cryptos?

That is what everyone is discussing about, many people still not aware of how lending works in Polo. What I understand is after lending there is no guarantee whether he will pay or not. I think when compared trading, lending has higher risk involved in it.

I read it somewhere else. May shed some light upon subject:

-->Once you put coins up for lending, the transactions are handled internally and automatically. The lender offers coins at his specified interest rate and the loans are generated automatically when someone places an order in margin trading. Lenders on Polo commit their coins for a minimum of two days. If someone holds a margin position for longer than the loan term, the lender gets his coins returned (with interest), and the system uses someone else's funds to keep the margin position open. If a margined positions falls below the 20% maintenance level (the bet has gone sour, and the margin trader's position has lost a lot of value), the trade gets force-liquidated and the loaned funds get returned (with interest).The loans are done internally and seamlessly. Don't sweat it -- loan funds are safe and borrowers can't run off with your money.<--

So two risks:
a. Exchange is hacked.
b. Too many short-sighted margin traders all coincide at the same time you lend and/or market crashes and exchange can not cover all the loss from the fees/commisions immediately.

It sounds like as long as the exchange on which lending happens is a trusted platform and willing to cover losses then the risk is zero-ish.

Does polo give such assurance under any contract?
As far as I know--> No.

But likelihood of happening item a or item b is not high as well.