We unlock cryptocurrency for trading - go short with Nitrogen Network.
As you already know, Nitrogen Network is a decentralized p2p lending network that allows lenders to match with potential borrowers. The most prevalent use case for lenders in the network is when they are looking to earn incremental returns in their assets. This is for people who don’t want to keep their assets idle in a wallet or an exchange, so they use the network to get returns in exchange for the providing their assets.
However, there are many use cases which involve borrowing crypto rather than lending it. Borrowing is a much more complex and diverse phenomenon linked to multiple use cases, one of them being short selling.
What is short selling?
Short selling is, essentially, borrowing a certain amount of crypto, selling the loaned amount in an exchange, and then repurchasing the assets once their price has dropped. Consider the following example: let’s suppose that the current price of BTC is $100. You take a loan for 1 BTC, and then you sell it, and get the $100. If the BTC market crashes or the price goes down, the price of 1 BTC would also de lower — say, $50. If you take advantage of the situation you can use only half of the $100 you got from selling 1 BTC to repay your loan, thus profiting the difference.
It sounds like a simple process, but that’s because it is. However, that doesn’t mean that selling short is an easy thing to accomplish. A trained eye is required, as you are basically predicting that the price of an asset will drop.
Further limitations for short selling
But acute speculation skills is not the only problem that people who want to short sell encounter. Currently, many crypto exchanges don’t allow for things such as margin trading or short selling, and the ones who do typically support only the top liquid cryptocurrencies. As things stand right now, short selling in crypto is extremely limited because of this. In order to have better opportunities for short selling in crypto, traders need to be provided with the ability to borrow a wide variety of tokens in a simple, secure way, which can be done with the Nitrogen Network.
How to short sell crypto using the Nitrogen Network
Nitrogen is a decentralized p2p lending platform, and it’s also one of the best options for borrowing crypto so you can go short. The process is also quite straight-forward and intuitive, and all you need is a Nitrogen account and a wallet with some crypto (that will be used as collateral).
- If you haven’t signed up for an account, you can log-in with your facebook or google+ account, and all you have to do to finish the process is provide your name and country and add a wallet (both metamask and ledger wallets are supported) and ETH address. Click here to log-in or sign up for a new account.
- Once you’re all set with your account, you need to find an active order that matches your request and your assets. If there are no active orders that fully convince you, you can always create a new order in the platform, where you can modify multiple parameters to your preference, including interest rates, LTV, collateral conditions and maturity. The Nitrogen Network strives to provide the most customizable and personalized experience possible.
- Once your trade has been placed on the chain, you will receive the cryptocurrency that you chose in your wallet. Now, you are able to sell it on any crypto exchange of your preference so you can buy it back and repay your order on the Nitrogen Network once its price goes down. Once you repay your loan, you will get your collateral back, and you will have made a profit from short selling.
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