I’ve been curious about why anyone would want to borrow crypto tokens and I saw this tweet: https://twitter.com/TomoDexOfficial/status/1277548017470410752
It kind of makes sense but just wondering if there are any other reasons/benefits for borrowing crypto assets rather than buying them directly? Has anyone actually made more profits from borrowing? it’d be great if you can share your experience with newbies like me. Thanks
Same here! I think on Twitter the team said that they are gonna make something like tutorials about it. For me even the benefit in the Tweet you posted was quite hard to follow and I actually had to write down the steps. Maybe it’s easier to understand for others but if we want mass adoption on those features, we actually need material to explain these features as easy as possible to others. We need videos where a 10 year old would understand straight away the benefits of lending and borrowing and how exactly it works.
Ideally this should have been released when new features like this were introduced and hit the market. Pretty much take the momentum of the hype that was created when lending & borrowing came out and accelerate it. Timing is everything and it’s quite easy to lose traction.
Firstly, you should understand the term ''short selling", which is an investment or trading strategy that speculates on the decline in a stock or other securities price. It may be used as a hedge against the downside risk of a long position in the same security or a related one.
In crypto space, you can borrow crypto token to either (1) sell at high price on expectation of its price decline then you can buy back at lower price to payback the loan or (2) swap to another crypto token that you expect a higher price increase relatively to the borrowed one within the same timeframe.