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RE: Did you know you can trade on Bitshares built-in decentralized exchange with ~2x leverage?
I struggle to see why I would do this, is there an even simpler explanation a available? Is Bitshares a bank? Can someone just borrow money or do we have to take short positions?
This assumes some knowledge of trading terms. New stuff is concept of borrowing on a decentralized exchange.
Why trade with leverage? you can magnify gains and risk by 2x - so more dangerous but also pays better. Additionally, higher leverage helps keep trading and providing liquidity profitable on smaller % changes helping stability - e.g. forex is often 50-100x leverage.
The DEX is interesting because you can actually borrow and move coins you borrow off the exchange. I borrowed a bunch of bitUSD when I thought BTS bottomed out, bought BTC with it, and moved it off exchange. I'll settle the debt in future if BTS is higher (and if not the loss is fine).
Smart contract on BTS blockchain is what holds your BTS as collateral and creates new bitUSD coins - not sure that counts as bank since there's no expectation of returning what you borrow. You can always hit settle on it and destroy the coin to get $1 of BTS out of the contract. If you never return bitUSD, doesn't matter, and you helped reduce supply of BTS increasing its value.
You can borrow bitUSD, and return it later, which will make 0 net difference. Shorting is the act of selling what you borrowed and buying it back at another cost to return later keeping the difference.
shorting a coin can also be thought as margin longing the coin you buy with the borrowed money.
tbh I found it fascinating and people introduced me to concept of stacking these - although have to keep in mind higher leverage = higher losses too.
thx for explanation, so is there no interest anymore for lending the dollar?
Like I saw some old video's which talk about someone lending the dollar and getting bitusd for it + interest versus the other guy borrowing the money and put 200% extra colletaral on it?
Where can I find this info?
I think they used to have interest on the dex, but it's been removed for some older reasons, which I think worked because fiat stable currencies exploded in market cap. right now blockchain can lend you bit* assets for locking up your bts as collateral.
check out the bitcointalk thread, it has lots of info links!