BitShares: How to take out profit from "Borrowing"

in bitshares •  5 months ago

What is Shorting?

Image: @btswolf

How To Make Profit

TL;DR: Smartcoins are created ("Shorted/Borrowed") to existence by backing it up with at least 2x the value in BitShares, the underlying asset.

In this example, I shorted HERO initially backed by 2.25x worth of BitShares.

BitShares price went up, which means the collateral "worth" went up as well.

By re-adjusting the slider, I was able to take out 0.5x collateral worth of BitShares - 8.8 BTS - as profit.

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When I was buying HERO the other day, I had the choice to simply buy it with BTS or Short it into existence. I haven't come to grips with the shorting process yet so I just bought. This was before the latest huge movement up. I think I would have done better doing as you did. I think I'll put in the time to fully understand this, for the future! Thanks for the article and GIF.

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yep, I made good money by shorting HERO.

but let's not forget that you can lose some if bts price drops. what I like about the hero is that it's not TOO bad if you lose, because you still end up with a 5% APR coin in your hands

Very good description of shorting in the cyrpto-space @ash

Why did you decide to short HERO?

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  • to make money
  • to get some HERO - you know I love dividend assets :)
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haha yeah I get those two points but why did you think it was going to drop so much? Obviously you were right with hindsight!

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pure speculation :)

I'm usually not the gambling type, but what makes HERO so cool is that even if I lost, I'd still hold a 5% APR token which would cover some of the losses over time :)

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Very interesting!

That's a good one, I'll try it out ASAP

Thanks!! , I was struggling with borrowing ..
I understand that through this we make profit when bts raises , is not it?
But what if I want to protect myself against a BTS price drop?
Are there warrants or somrhing like this?

Why would you short HERO when you can short bitUSD? Hero will actually cost you the prorated 5% interest (you don't earn interest because you're shorting), while bitUSD won't? I'm not seeing the benefit here.