#6 - BTC Future Purchase

Published in

MetalSwap

6 min readAug 23, 2022

#Use case 6-Freeze today BTC price without spot buying!

Welcome back Swappers!
Our Kovan Testnet Phase3 is near an end: we are getting ready for the MainNet!
Therefore, on Wednesday 31 August we are taking a snapshot, looking for every XMTt3 owner…
The Time has come to rake in all your rewards in XMTt3, which will be exchanged for real $XMT tokens after the start of MainNet, which is getting closer and closer!

Meanwhile, you may play a little more with MetalSwap’s Kovan App to open a 7-days Hedging Swap through the following newest use-case:

⚡#6 - BTC Future Purchase!

We want to show you a very concrete use case that looks at a very contemporary market aspect, The Bear Market situation for the Crypto Assets!

Let’s imagine that you are in a very delicate market situation, several fundamental news and “heavy” events, have grafted a lot of fear in investors and this has generated panic sell bringing the BTC price down to 21314 $USDT.

As a good Crypto Investor, this phenomenon does NOT scare you, in fact, knowing the potential of Bitcoin, you understand very well that this is a very good Buy Opportunity!

Knowing the high volatility of this market, you know that this moment could last a very short time causing the price to sprint upward in a few days causing you to miss this opportunity; in fact, if BTC returned for example to 30000 $USDT you would lose a profit of 8686 $USDT.

In this scenario the profit will be 8686 $USDT (minus the premium payed to Open the Swap) that you’ll get in WBTC.

At this moment you’ll need liquidity to buy on spot market, but you don’t have any right now because your $USDT are staked on a Cefi platform for 15 more days.

‘Don’t Panic! The Hedging tool offered by MetalSwap can protect you from this scenario!

Let’s proceed now and look the details!

Select the commodity on the Dashboard — in this case, WBTC

Important! Our platform runs in an ETH environment and the most widely used ERC-20 token pegged to BTC is WBTC. We are using it to correct and set our commodity exchange to the price of BTC.

Commodity: WBTC

Coin: $USDT

Target Size: 21314 $USDT; The TARGET SIZE has been set to work with 1 BTC, countervalue in $USDT at now, current prize 21314 $USDT. ( From here you can calculate the amount to work with )

Duration: 15 days

Cover: 4262.8 $USDT (20%)

You previously set the EXPIRE DATE at 15 days. The platform automatically closes the SWAP when the set DATE is reached, therefore you cannot speak of Take Profit, we speak instead of Expiry date.

The Liquidity Reward is automatically calculated on the data provided, in this case: $1796.04 $XMT

To protect yourself from the scenario described above, you will open an upward position, allowing you to have the same benefits as buying 1 BTC at today’s price. The Cover needed is 4262.8 $USDT , this is because MetalSwap has allowed you to work with a Margin.

How?

Very simple, if the BTC countervalue goes up during the period set, your open position on MetalSwap will go into profit by recognizing you the difference with the printed price at the time of the Swap!

Conversely, if the BTC countervalue goes down during this period, you will be very happy as you will have the opportunity to buy your asset at a greater discount.

As you can see whatever the scenario you are in a win-win situation, considering the Premium you paid to open this Swap, or “Price change Insurance”, we can say.

Isn’t that great?

Is very important to remember that, if you wish to keep this Swap Open, the dashboard shows you that the WBTC price must never be below the Threshold of 18117.02 $USDT, otherwise your position will be Liquidated after the entire Cover is eroded.

As mentioned earlier, this position on MetalSwap ‘s platform, will cost you a Premium of 1936.73 $USDT (The Premium value will be different on the MainNet, our team is working on it) plus the Cover of 4262.8 $USDT as margin to keep the position open whenever the price goes against the commodity price.

Once the exchange is automatically closed after its expiration date, the Cover will be returned. If the Swap is manually Closed earlier, the Cover will be returned minus a penalty.

ALL CLEAR?

LET’S NOW PROCEED TO OPEN YOUR COVER!

Click on the Execute Swap button, confirm your transaction, and your Swap is now OPEN! It will apper a string below:

The Swap is now Open!

To see the status of your current swap, just click it

Now consider the two new buttons you can choose to click before our swap expires:

-Refinance Swap

-Close Swap

Let’s say it again: if you wish to close an open Swap of yours for any reason, you may do so, and you will get less Cover back as a penalty.

Your reward in XMT tokens will be proportional to the amount of time your Swap has been open and will not be what was indicated when you opened it.

It is good to always keep in mind that if the price is approaching your Threshold, but you do not want to close or risk liquidation, you can add $USDT to have more Coverage and then click “Refinance Swap” to add more margin to your active Swap.

We’re sure you will now experience moments like the ones described with much more euphoria, do you agree?

But it doesn’t end here, many more use cases await you here on Medium, so be sure to stay tuned!

And don’t forget to collect every XMTt3 you can before the end of the month, Kovan Swappers! ;)

What a Time to be in DEFI!

⚠️Warning⚠️

❗ METALSWAP ‘s admins or moderators will NEVER contact you directly on any social under any kind of circumstances.

❗ Everything concerning $XMT ‘s smart contracts and addresses is shared by our official channels (list below), do not trust any different info from any different source.

To the MetalSwap!

… and beyond!

✎ What is MetalSwap?

MetalSwap is a decentralized platform that allows hedging swaps on financial markets with the aim of providing a coverage to those who work with commodities and an investment opportunity for those who contribute to increase the shared liquidity of the project. Allowing the protection for an increasing number of operators.

With MetalSwap we enable hedge swap transactions through the use of Smart Contracts, AMM style.