Member-only story
Alpaca Academy -Research on Increasingly Leveraged Pairs-
Good morning.😊
Last time we featured Alpaca Finance.
Today, we are going to study DeFi with Alpaca master.
I’d like to share with you a story from the Alpaca Academy about how leveraged farming can be profitable even in down markets if used properly.
When you use leverage farming, depending on the pair you choose, the value of the LP may go up, but for some reason you don’t make as much profit as you expected.
In other words, if you don’t understand the characteristics of the pair, which one you owe, and which one can be profitable if it goes up, you can lose unexpectedly, so today’s note is a must.
Okay, let’s go!
How it all started
It all started with a tweet from Mr.Medaka. (Thanks!)
I was interested in this, so I read the full original article on Medium.
I read the full article on Medium because I was interested in it, and it was very informative, so I’ll give you a quick overview. I’ve tried to separate the overview from the details as much as possible, so that those who are not interested in details can understand just the overview, and those who want to know more can enjoy the details.
1-(1) What is a short?
“Buying when the price is low and selling when the price is high” are the basics of profiting from trading, and this is called Long.
Shorting is a method of making a profit by “selling when the price is high and buying back when the price is low”. It can be said to be the same as the basics of trading, only the order is reversed.
Shorting is a common practice among traders (speculators), for example, in FX (Foreign Exchange Trading), shorting is achieved by “borrowing” the target asset first.
