Use-Case #2 — BTC HODLER

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MetalSwap

5 min readAug 1, 2022

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Let’s say you are an investor and your strategy is to accumulate more BTC possible.

You know that in the long-term BTC price will rise due to how this asset has been designed, you also know that another characteristic of BTC is high volatility.

You want to maximise your accumulation without ever selling your BTC, so that you can keep them in your portfolio or stake them on another platform.

You have a long-term vision of BTC however you think that in the short term it may have a fall in price.

How can we take advantage of this opportunity?

Let’s say that you have accumulated 0.5 BTC and its value is now 21,640 USDT.

This could mean that if the price of 0.5 BTC drops to 14,000 USDT, you would temporarily lose 3820 USDT in value (or purchasing power).

You want to take advantage of this downtrend to generate more liquidity, so you can accumulate more BTC and maximise your accumulation.

At this moment you can decide to Open a Swap.

Open the platform and choose the WBTC commodity.

Hedging against price LOWERING

Important! Our platform runs in an ETH environment and the most widely used ERC-20 TOKEN anchored to BTC is WBTC.

Let’s set the platform on WBTC, in the second section on the right then raise the Threshold Slider (we can take it as a stop loss) to 30%. Now you can also see our operation graphically on the left.

The forecast has a time horizon of one month, so you’re going to set the Expire Date to 30 days.

Let’s go and analyse the operation.

Capital required for the operation:

Premium + Cover = 0.06203 + 0.15 = 0.21203 WBTC

Please note:

The cover will be returned to you if the operation hits target.

The maximum loss of this operation (stop loss) is 0.15 WBTC,

in case the price goes above the threshold value of 27050USDT

(Liquidation of the position) and only If the operation is not closed early and the Threshold level is not changed during.

Now let’s imagine that BTC reaches a price of 14,000 USDT in the expected time, we can see how the gain (take profit) of our Swap is composed of:

Price of the cover returned + difference between the entry and our target + reward in $XMT

0.15 WBTC + 3820USDT

You also get 1180.12 $XMT from using the MetalSwap app.

This is collected over the chosen time period!

You can stake them, or just hold them so you keep a rising vote power in the DAO.

To open the operation on Metal Swap, you will have to pay a Premium that will be used to buy back $XMT on its close / expiration / liquidation, whatever the fate of this swap.

Now let’s analyse all the scenarios of this operation.

- If the operation reaches the target BEFORE the 30 days scheduled, and you decided to close the operation because you are happy of the gain that you made, will have to pay an exit FEE and the $XMT that will derive in reward will be proportional to the period in which the swap was open, otherwise you can decide to run the operation and increase the gain.

- If the operation goes in the opposite direction to the expected one you will lose the cover if it exceeds the threshold value; in this case the Threshold value is 27,050.45 USDT.

Currently there is the possibility to change the Threshold level simply by changing the cover percentage.

- If the operation goes in the opposite direction to that expected and you close the operation before the expiry, you will be returned the part of the cover NOT eroded, minus the exit FEE.

In each of these cases you are still making a profit on the already purchased BTC.

Basically,

Metal Swap is used to set a price, not allowing us to fall below a certain threshold, which can also be managed later.

In the traditional finance this is call Hedge. Hedging is the practice of taking a position in one market to offset and balance against the risk adopted by assuming a position in a contrary or opposing market or investment.

Now, let’s see together how this swap is going in 30 days!

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.