Quote from: coinyard on March 11, 2016, 02:54:32 PM

Quote from: NorthPixel on March 10, 2016, 09:43:05 PM

Quote from: lemipawa on March 10, 2016, 10:36:32 AM

I havent tried the lending or borrowing from poloniex but I think thier investment with lending bitcoins to polonix users are secured with the altcoins stored in poloniex by the borrower. Just like in the lending section in this forum, collateral can be alts that borrowers dont want to let go.

The problem is that the collateral could drop 60% in value within a few seconds. The Poloniex might not have time to sell the altcoin and recover the bitcon for the lender.

Has this event happened in the history of the lending business of Poloniex? When the borrower borrow bitcoin, is there a restriction on what they can buy?

it has probably not. however, it eventually will, with absolute certainty. Recently it happened in the 'real' world with the swiss franc and some companies, like Interactive Brokers, had to eat a bunch of losses when the trader couldn't pay up. When this happens, and it will, the question is whether Polo will eat it in order to have rep in the market or whether they will say 'too bad so sad'.

This might be years, but it must happen eventually. It's a black swan kind of thing. Markets always have this problem eventually. It's just rare, so nobody prepares. I'm not sure how you would actually.

clf99

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