A number of crypto exchanges offer margin opportunities for traders, allowing you to take out margin loans from the exchange or fellow users. You can use this service to retain your margin positions and enjoy a better chance of increasing profits.
However, it could also create a higher chance of suffering losses, too, as margin trading incurs a bigger risk than standard exchange trading.
With such crypto exchanges as Poloniex and Bitfinex, users can transfer money from their wallets to provide loans to fellow traders. While these opportunities benefit traders, lenders can also achieve low-risk ROI, as margin loans are unable to be taken off the exchanges themselves. That means anyone borrowing funds cannot withdraw them to a different wallet, creating better peace of mind for lenders.
Another key point is that lenders are unable to lose their money when the borrower’s position becomes negative. With margin positions, one is the maintenance margin: a level is set by an exchange’s algorithm automatically when the individual enters a margin position.
If the trader’s account sees a drop in value, even falling beneath the maintenance margin, this can lead to a margin call. As a result, the position will be closed automatically and all funds borrowed are given back to the lender. Interest may be included.
What are the Biggest Crypto Lending Bots?
Here are the two most popular crypto lending platforms:
Gimmer
With Gimmer, users can create their own bots for monitoring the lending market and offering loans on currencies with the strongest potential returns. This platform incorporates user-friendly advanced bots demanding no experience of programming, trading, or dealing with cryptocurrencies.
This makes Gimmer an ideal option for traders and investors at all levels. Anyone who wants to generate profit on cryptocurrencies but lacks the time to watch market activities all day long is likely to find this a fantastic solution.
This is how Gimmer works:
- The lending bots choose the asset offering the highest daily rate profitability
- The lending robot places funds on the exchange to be lent, automatically
- You earn potential returns on your investment with little risk, thanks to the automated bots
Coinlend
Coinlend Bot is compatible with various lending platforms. It was created in 2017, but has gained considerable traction since.
Coinlend is designed to help increase your interest rates for lending cryptocurrency and Bitcoin. This automates the processes of selecting interest rates and tracking earnings/investments. Taking the manual route for picking lending rates can be much more time-consuming, and you would have to tweak your requested interest rates every day to boost your interest. A basic version of Coinlend is available for free, too.
You’ll have to make an API key for every lending platform with which you expect to utilize the lending robot, but this is easy. Make sure you keep your keys secure and avoid storing them online (e.g. in emails).
Simply enter the keys into the Coinlend site, and your account will be updated within around 15 minutes. Next, just choose those features you want to use and input your preferred values.
CoinLend highlights:
- Less time-consuming than setting up your interest rates for lending Bitcoin and cryptocurrencies manually
- Achieve better interest rates
- Take advantage of the free (but basic) version
- Keep track of your cryptocurrency and Bitcoin lending earnings, as well as the amount you can expect to earn the following month
This guide should help to make getting started with crypto lending platforms easier. Follow the above tips to start saving time and increasing your profit potential now!
