Do you have any experience with margin trading and lending pools? No? Well, you’re in luck today! Robi is here to help you out!
Is everybody ready to start? Let’s go!
What is Margin Trading?
💸Margin Trading is a way for traders to borrow funds from a third party and use them to increase the amount of capital to leverage their positions. Leverage means how much traders can multiply their position. For example, 10X leverage means they will profit 10 times by multiplying their exposure. So, in essence, margin trading enhances trading results so traders can achieve more significant profits.
In a decentralized crypto trading environment, funds are often provided by anonymous users who earn interest based on the market demand. Traders and borrowers remain incognito but follow the rules defined in smart contracts. Until all conditions for closing trading and lending positions are met, all funds will be held in smart contracts.
How Does it Work?
As I’ve mentioned above, margin trading allows users to borrow funds to increase their position and gain greater profit. So to borrow a substantial amount of assets to trade with, users give the exchange a small portion of their own assets.
Margin trading involves opening a position with a deposit, known as the “initial margin,” and maintaining that position with a set amount of capital, the “maintenance margin.” The amount of leverage offered by different crypto exchanges varies. Some might offer 100X leverage, while others set a limit at 50X, 20X or less.
An exchange holds your capital as collateral when you open a margin trade with it. In margin trading, the amount of leverage you can use depends on the rules of the exchange you trade on.
Are you still with me? Now, let’s move on to the Lending Pool.
What is a Lending Pool & How Does it Work?
💠Lending Pool — a smart contract that lets users deposit and loan funds, permitting businesses to create applications that generate interest. Lending pools serve as central accounts where users can deposit money.
To comprehend how these pools work, let’s take OpenLeverage as an example.
Users can place leveraged trades using OpenLeverage lending pools. Each trading pair has its own independent lending pool to maintain risk isolation.
An OpenLeverage protocol lending pools allow users to supply any asset. Despite sharing a similar asset, the lending pools of different trading pairs remain independent. For instance, the BSW tokens of the BSW-BNB and BSW USDT trading pairs will be divided into two separate fund pools.
Find more details about lending on OpenLeverage:
And finally, let’s see how you can use BSW to profit on OpenLeverage!
BSW Integration in OpenLeverage | Boost Your Income!
A quick reminder about Biswap x OpenLeverage collaboration. Put your BSW to use and multiply your assets! Check out the possibilities:
- Lending pools and margin trading markets integrated with the BSW/WBNB and USDT/BSW pool on Biswap, enabling users to use $BSW as collateral to borrow WBNB to have BSW token leveraged positions and use $USDT as collateral to borrow BSW to have USDT token leveraged positions.
- Permissionless margin trading support for all pairs on Biswap.
- $OLE incentive for lending and margin trading for the BSW/WBNB and USDT/BSW pair on Biswap.
- Initiate Referral Program and Invitation League
The inviter will receive up to 25% extra reward, while the invitee will receive a 5% reward. In addition, 46.6% of the trading fees will be distributed to the top referrers.
Margin trade tutorial:
Lend to earn tutorial:
No time to waste! The sooner you start — the more you will gain!
Learning with Biswap is great. But don’t stop here. You need to put your knowledge to practice! Earn more with Biswap x OpenLeverage.
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