Follow Rarma on X and YouTube for more!
The following is a summary of Rarmas content, courtesy of ICI.
Introduction:
Discover the exciting world of perpetual leverage trading with Margined, an innovative app built on Osmosis. Learn how leveraging perpetuals can amplify your profits and explore the current token options available. Get ready to dive deep into the mechanics of Margined and discover the unique benefits it offers to both long and short position traders.
Understanding Margined and Perpetual Leverage Trading
Margined is a revolutionary app that operates on the Osmosis network, focusing on leverage perpetuals. By using this app, users have the opportunity to trade perpetual contracts with leverage, which can significantly enhance their profit potential. While currently limited to trading the Osmosis token, Margined has plans to expand its range of offerings to include squared Atom and squared Bitcoin in the future.
Unleashing the Power of Squared Osmosis
One of the key elements of Margined is the concept of squared Osmosis. In this system, the token price of Osmosis is multiplied to provide squared Osmosis for leverage. When engaging in long positions, traders swap regular Osmosis for squared Osmosis to gain exposure to price movements. It is worth noting that the price of squared Osmosis, also known as SQ Osmo, is typically around 20% higher than regular Osmo. However, the yield percentage increases exponentially as the price of Osmo rises, potentially leading to significant profits.
The Power of Quadratic Math in Maximizing Profits
One of the unique aspects of trading on Margined is the utilization of quadratic math to multiply profits. Squaring a number less than one results in a lower number, which in turn lowers the price of squared tokens. This characteristic allows for the multiplication of profits earned from square tokens. It’s essential to grasp this powerful mechanic as it sets Margined apart from traditional trading platforms.
The Intricacies of Opening Long and Short Positions
When opening a long position on Margined, traders exchange Osmosis coins for squared Osmosis coins and hold them until the price rises. This core mechanism facilitates profiting from price movements. On the other hand, short positions on Margined work differently. To initiate a short position, traders need to provide collateral of at least 10 units. This collateral serves as a safety net and mitigates potential risks. Choosing safe collateral and understanding liquidation risks are crucial steps when considering short positions.
Managing Risks and Liquidity: A Balancing Act
Short positions on Margined carry lower liquidation risks when compared to traditional short positions. This is mainly due to the nature of the squared tokens. Although short positions can be liquidated, the chance of liquidation is minimized, making it a more secure option for traders. Holding squared Osmosis tokens also acts as a protective shield against liquidation, but bears the risk of faster monetary loss if the token price drops. For long positions, liquidation is not a concern.
Unlocking the Potential: How Collateral and Short Positions Work
Collateral plays a crucial role in Margined and determines the safety threshold for short positions. When initializing a short position, Margined utilizes a portion of the provided collateral as a premium and mints squared Osmosis coins. Traders can choose to sell these squared coins for profit if the price goes down, providing an additional avenue for earning rewards. Additionally, liquidity can be provided by traders to pools for popular tokens like Atom and Bitcoin, further harnessing the full potential of Osmosis.
Capitalizing on the Benefits: Margined vs. Spot Holding
By using Margined, traders can open and close short positions and earn attractive rewards, especially in pools with low liquidity. A graph comparing the performance of holding squared Osmosis versus spot holding shows a remarkable 74% increase with Margined, compared to a 30% increase with spot holding. This stark contrast highlights the advanced features and elevated understanding that Margined offers in the world of leverage trading.
Conclusion:
Margined’s integration with Osmosis opens up a world of possibilities for traders seeking to unlock the potential of leverage perpetuals. Whether you’re interested in long or short positions, Margined provides a secure and efficient platform to amplify your profits. By understanding the mechanics of squared tokens, managing risks, and harnessing liquidity, traders can capitalize on the unique benefits that Margined offers. Explore the power of quadratic math and revolutionize your trading experience with Margined on Osmosis today!
