Long

Before reading this, please make sure that you understand leverage first

When a Long is useful

• Say you got 1 EGLD, and you think EGLD will go up in the future

• You would like someone to lend you USDC so that you can buy more EGLD

• Later on you need to repay the USDC debt, but thanks to EGLD's increased value you need to spend less EGLD, and leftover EGLD goes into your wallet as a profit

Example

• You start a 4x EGLD Long on XOXNO with 1 EGLD, ending up with 4 EGLD @ 15$ as collateral and 45 USDC @ 1$ as debt

• If EGLD goes up X%

  • You win 4X%, because you have exposure to 4 EGLD instead of just 1 EGLD

  • To start the position, 45 USDC were swapped to 3 EGLD

  • To close the position, you need to spend less than 3 EGLD to repay the 45 USDC (because EGLD became more valuable)

  • So not only do you gain X% on your initial collateral of 1 EGLD

  • But also on the 3 EGLD that you leveraged, because the leftover EGLD after repaying the USDC goes in your wallet

• If EGLD goes down X%

  • You lose 4X%, because you have exposure to 4 EGLD instead of just 1 EGLD

  • To start the position, 45 USDC were swapped to 3 EGLD

  • To close the position, you need to spend more than 3 EGLD to repay the 45 USDC (because EGLD became less valuable)

  • So not only do you lose X% on your initial collateral of 1 EGLD

  • But you also need to use part of your initial collateral to repay the USDC debt (because 3 EGLD are not enough anymore), so that you may get back e.g. just 0.8 EGLD instead of your initial 1 EGLD

Advanced Long

• In the previous examples, you were always Longing EGLD against a stable coin like USDC

• But you can actually Long any coin against any coin

• So you can 4x Long EGLD against XOXNO, WETH, WBTC, or any other supported market

• Be aware that when longing a volatile token against another volatile token, you get influenced by both token's price fluctations

  • For example, when Longing EGLD against XOXNO

    • You profit when

      • EGLD goes up (because you'll need less EGLD to repay the XOXNO debt)

      • XOXNO goes down (because you'll need less EGLD to repay the XOXNO debt)

    • You lose when

      • EGLD goes down (because you'll need more EGLD to repay the XOXNO debt)

      • XOXNO goes up (because you'll need more EGLD to repay the XOXNO debt)