BitShares on the rise; How to enjoy the ride and still cash out if you need

in bitshares •  2 years ago 

Enjoying the ride, BTS on the rise again!

Most of us are enjoying the push in the price of BTS (Bitshares) lately. The coin has risen from $0.05 per BTS to $0.1 BTS in just a few days.

Owning BTS? Then you can borrow from yourself!

One, convenient, feature that the BitShares DEX has is that if you own BTS, you can use it as collateral. Simplified, this means that you can borrow from yourself.

You can borrow bitUSD, bitBTC, bitCNY, bitEUR, BTWTY and HERO assets. With a collateral of just 2x the amount, you can free some funds to use without losing your BTS value.

What is collateral?

By locking up your BTS as collateral, you can receive, in return, another asset in equal value times the ratio. At present, when BTS is worth $0.1 you can borrow 50 bitUSD by locking up 750 BTS. The ratio needs to cover any price changes and needs to be at least 1.75x the current price. If your ratio can no longer cover your debt, your loan will be force settled, which is when the network takes your collateral to cover the loan.

Each borrowable asset has their specific settings, which you should look up before doing any borrowing.

How to borrow bitUSD for BTS; An Example

  • First, you need to own BTS on the BitShares DEX. If you do this, then you are all set and can go to the wallet, either through your Light Wallet Client or on https://wallet.bitshares.eu
  • After logging in successfully, you go to the Account tab in the menu.
  • Then click on Margin Positions where you can see all the current borrowable assets, aka where you make Margin Positions.

What the Margin Window Means

  • Feed Price - This is the current price for one bitUSD in BTS
  • Your call price - Depending on your margin ratio, this is the lowest BTS price your collateral will be able to cover.
  • Debt - This is the amount you wish to borrow
  • Collateral - This is the amount of BTS you wish to lock up
  • Ratio - The ratio is how much of a price raise your collateral will cover. 1.75 means it will cover the exact price (not recommended), 3.5 means it will cover double the price.

When you're happy with your position, click on the Update Position button and approve the transaction. Your asset will be in your wallet instantly.

What we have now...

So far, the chain has only created new bit-assets with your BTS as safe-keeping. Regardless of how the price now shifts, within your collateral ratio, you can still update the position to 0 debt, and nothing has happened.

What we can do now, is to sell this new bitUSD on the market and use them for whatever we wish. We can do more trading or buy something fancy.

Remeber...

that you still need to cover your debt at some point in time. Your current bitUSD is just a loan from the network, and if the BTS price drops again, you will be required to cover it with more BTS. If your BTS cannot cover your debt, they will be used by the network and force settled.

What Force Settlement is

When your BTS can no longer cover the value of the loan in BTS, the network will make sure that your debt is paid back. The network does this by putting your collateral BTS on to the market with a 10% discount for the buyers.

Good Luck, and happy trading!

Join the Decentralized Trading, join the BitShares DEX today!


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The ability to use BTS as collateral for interest-free loans is one of the most powerful, and least known, features of Bitshares.

We need to liberate the world with the power of the DEX :)

What bitshares needs to do is publicity and simple tutorial videos to explain how to use bitshares and how to get collateral. People still go to centralized exchanges because bitshares UI looks complicated

Thank you for laying this out so clearly. I experimented with making a Hero when it first launched but it got margin called. I want to try some smaller amounts and learn some more. Appreciate your post!

If only this article was posted just a little sooner...
i have to admit i had trouble understanding how i could make use of this at first.
Luckily i figured it out before BTS started to go up in value,
and im now able to pay off all my "debt" with a nice profit.

Question: is the openledger dex and the bitshares account/dex the same? If not, what are the differences because it certainly looks all the same.

BitShares is the DEX, an open and decentralized exchange, and also the blockchain, but also a wallet, where you can store your tokens, coins and various other assets.

OpenLedger is an exchange company, operating on top of the BitShares DEX, which means that their ledger is public compared to other markets where the ledger is private.

RudEX is also an exchange company operating on top of the BitShares Dex.

Thanks for clarifying!

Yes, they run on top of the same blockchain...it's like multiple banks working on top of the same payment network (SEPA, SWIFT).

Thanks!

Bitshares has been a great investment

Thanks for the valuable info. I didn't know about this. Gonna check it out right away :-)

This is great. I love the fact that bitshares is decentralized. Can't wait to start seeing goood volumes

Truly. The DEX needs some more volume, but still can't understand why someone would chose a centralized exchange over this. 😎

I think it's because there are just little video tutorials on how to use bitshares and little publicity

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Oh yes yes ! I saw it in my wallet ☺️

Interest free loans with BTS? Sounds like a margin account.

Wow another reason to buy bts

So many reasons 😎

Wow didn't know you could do that... I really need to be more secure with platform and exchange more btc and eth for bts.

Thanks for sharing! A link to your post was included in the Steem.center wiki article about BitShares. Thanks and good luck again!