Poloniex

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Poloniex is one of the most well-known US-based cryptocurrency exchanges that was founded by Tristan D'agosta in January 2014. The exchange team doesn't disclose private information about themselves since the activity of cryptocurrency exchanges in the US still doesn't have a clear legal regulation. In early 2018, the exchange’s daily trading volume reached $150 million, and went down to $33 million by October 2018. Nevertheless, Poloniex remains one of the most convenient exchanges to trade altcoins - 107 trading pairs are represented on the exchange.

Poloniex services

The cryptocurrency exchange provides three types of services:

  • Exchange
  • Margin trading
  • Lending

A user has three separate Poloniex accounts - Exchange, Margin, and Lending.

An Exchange account is used for regular trading on an "Exchange" tab.

Tristan D'agosta

A Margin account contains user's funds that he/she has borrowed from other users.

A Lending account is intended for those funds that the user lends to other traders to earn interest.

These features attract traders who can trade with their own funds, or with borrowed money, or earn interest by lending their funds. Thus, when trading with borrowed funds, the interest and the amount of loan are indicated in the Margin account. Similarly, a user who is ready to lend money indicates the amount, term and the interest of the loan in the Lending account.

Also, Poloniex provides “Stop limit orders” service, which is typical for most crypto exchanges. This option allows traders to set purchase and sale parameters in such way as to protect profits and minimize losses.

Poloniex markets are represented by five cryptocurrencies: BTC, ETH, XMR, USDT, and USDC. Thus, users are able to perform deals with trading pairs like DASH/Monero etc. USDC is a new stablecoin, that is pegged to the US dollar. Users can convert dollars to USDC through the Circle web app.

Main disadvantage of Poloniex is lack of fiat pairs, and it is the new USDC stablecoin that is aimed at offsetting this flaw and hedging Poloniex risks in case of eliminating the use of USDT.

Poloniex trading fees

A fee for Poloniex services depends on a transaction amount and whether a trader is a maker or a taker. The greater the total trade volume over the past 30 days, the less is the Poloniex fee. Crypto exchange encourages makers with lower fees because they create liquidity (place orders) absorbed by the takers. For makers, the fee is 0 - 0.10% of the trading volume of the 30 previous days, and 0.10% - 0.20% for takers. Also, the maker-taker pricing model leads to tighter spreads, as it encourages makers to outbid each other.

Poloniex also charges 15% of the amount of interest earned by a lending user.

Specific features of registration and fund withdrawal on Poloniex

When registering, a user specifies name, last name, e-mail, and country of residence. These rules follow the exchange’s status of a Money Services Business (MSB) and comply with the requirements of U.S. law.

In order to access the full features set, including withdrawal, a user has to go through several steps of verification.

For example, to withdraw more than $2000 per day a user needs to specify a full address and a phone number. To withdraw more than $7000 per day a social security number or a photo ID (passport selfie) is required. An account is protected by two-factor authentication.

Poloniex significant milestones

On March 4th, 2014 Poloniex was hacked. Hackers stole 12.3% of BTC (97 BTC). Poloniex founder Tristan D'agosta stated an explanation on behalf of the exchange and promised to compensate for the loss of those users who got hacked. On July 2th, 2018 Poloniex announced the full repayment of stolen BTC to those users.

However, security isn't Poloniex's greatest strength. In October 2017 independent IT researchers identified two malicious credential-stealing apps on Google Play. These apps were listed on Google Play as Poloniex official mobile apps. In fact, these apps collected users’ data to get access to accounts and steal funds.

In February 2018, Poloniex was acquired by Circle, a global crypto finance company based in the US. According to Poloniex statement, the purpose of this merger is further improvement of user experience, extension of functionality, and strengthening security. Thanks to the merger, fiat funds are now available at the exchange via UCDC stablecoin, as well as the Circle web app.