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RE: How To Be The Bank and Lend Out Money on Poloniex for Guaranteed Daily Interest
You can also do this on Bitfinex and Quoine, by the way. It's a big innovation in the crypto world, a proper debt instrument. As the top (currently) comment asks, and is answered, these positions are automatically liquidated when a margin requirement is no longer satisfied, and causes a Margin Call, the lender gets their money up to that point (including interest) and the borrower (the margin trader) gets a haircut.
"gets a haircut."
I hear Bitfinex gives free haircuts with every loan.
general cursing and angry words about rotten scamming bastards... AHEM. yes.