Long/Short Position Deposit Update
Greetings, KLAYswap community.
We inform you the update on the long/short position deposit previously announced through the community.
The features of KLAYswap’s long/short position deposits
As opposed to the existing KLAYswap deposit function, which has a focus on long positioning that seeks profit in a bullish market by supplying assets to the pool, the long/short position deposit can build a short positioning that can make profit even in a bear market, making it possible to form a more sophisticated digital asset portfolio. Thus, position depositors can not only maximize their profits by optimizing the ups and downs that characterize the digital asset market environment, but also respond effectively to the risks of market volatility through asset hedge.
* Long Position Deposit
Based on the value of the stable assets that users deposit, KLAYswap’s long position deposit users can open up to three times the size of their long position. In order to open a position, stable tokens are borrowed from a single deposit pool, and the borrowed assets are swapped for desired tokens and used to open long position.
* Short Position Deposit
Based on the value of the stable assets that users deposit, KLAYswap’s short position deposit users can open up to three times the size of their short position. In order to open a position, stable tokens are borrowed from a single deposit pool, and the borrowed assets are swapped for stable tokens and used to open short position.
A long/short position (margin trading) is a familiar way to maximize profits on financial markets as well as digital asset markets. But KLAYswap’s long/short position deposit comes with the following advantages.
Maximizing Economic Upside Through Long/Short Positioning of the DeFi Token
Majority of the long/short services provided by major central exchange are limited to major asset contents such as BTC and ETH. However, KLAYswap’s position deposit does not limit itself to positions for major assets, but also includes the unique token content of the Klaytn DeFi ecosystem.
Due to its growth potential, the DeFi token compared to major assets can undergo rapid value fluctuations, and depending on the position it takes for the asset, can gain a greater economic upside. Users of KLAYswap’s position deposit will be able to build a broader token portfolio, including new token contents, and preempt their own economic opportunities that can only be approached in the DeFi ecosystem.
*Long/Short Position Deposit Support Contents (Will be added)
KLAY, ETH, XRP, ORC, BORA, MBX, WEMIX
Stable Leverage Based on Stable Asset
By utilizing leverage, KLAYswap’s long/short position deposit users can maximize profits by opening positions on a larger scale than their owned assets. Long/short position deposit users can open positions up to 3x the value of stable assets designed to sustain value, and assets borrowed for leverage can be utilized at reasonable interest rates ranging from 0.01% to 0.02% per day in a single pool of KLAYswap. Using this system, users of long/short position will be able to increase capital efficiency while maintaining investment management stability
* Available assets when opening long/short positions
USDC, USDT, DAI
Offsetting Expense with Additional Compensation Return
In a long/short position deposit, users can automatically earn single pool deposit interest and KSP rewards by depositing secured assets(deposited assets and assets obtained through long/short position openings) respectively in a single pool of KLAYswap. It has a complementary structure that offsets interest costs on borrowed assets by generating additional compensation return as well as net profit from rising and falling of token values.
* Secured Assets
Long Position: Long position tokens being held
Short Position: Stable tokens possessed after token sale
The expected effects on KLAYswap
As digital asset markets rise and fall, there is inevitably a continuous demand for trading in order to maximize profits, and KLAYswap intends to incorporate this demand to the protocol through long/short position deposits.
Long/short position deposits are expected to create a virtuous cycle of single deposit pool asset operations — additional liquidity inflows — interest rate formation, and ultimately revitalize transaction volume, which is the ultimate goal of the protocol.
In particular, if the borrowings for opening long/short positions are more utilized (borrowed) from a single deposit pool, higher deposits returns can be distributed to depositors, naturally, larger number of people who want a high deposit rate will deposit their assets into a single pool. With the additional liquidity inflow, asset borrowing costs are lowered, resulting in activation of plus deposits and long/short positions.
Meanwhile, the swap transaction that occurs when opening and removing long/short positions increases the transaction turnover ratio of the KLAYswap pair liquidity pool, which generates larger number of transaction fees.
A large number of transaction fees means more KSP value increases (buyback & burn), and the increased value KSP is distributed back to each liquidity pool based on a high interest rate, promoting additional liquidity inflows. Thus, the KSP token economy can continue to function through the rise of the total protocol TVL and repeated activation of the transaction volume based on the increased TVL.
Additionally, various token contents in the Klaytn ecosystem will allow DeFi users to hold tokens for a long time or provide new financial opportunities to earn additional profits with tokens. As a result, token demand and usage will increase, resulting in an opportunity to build a user community and expand the ecosystem.
With this update, KLAYswap has been strengthened as a comprehensive financial portal that enables users to maximize profits by trading digital assets, depositing, leveraging, and airdropping. With these updates, we will continue to expand our ecosystem using multi-chains instead of becoming one of Swap services.
[Official sites & communities]
- KLAYswap: https://klayswap.com
- KLAYswap Twitter: https://twitter.com/klayswap
- KLAYswap Telegram: https://t.me/KLAYswapofficial
- KLAYswap Discord: https://discord.gg/KLAYswap
- KLAYstation: https://klaystation.io
- Orbit Chain: https://orbitchain.io
- Orbit Bridge: https://bridge.orbitchain.io
- Meshswap: https://meshswap.fi