Margin Trading Updates
Thanks to you Margin Trading just got a whole lot better!Read More
Yo dawgs, we heard you like bitcoin, so we gave you a way to put more bitcoin on your bitcoin.
Like most of you, I feel that my BTC stack is, um, a little on the short side (like the rest of me 🤨). Sure I have been HODLing for years, but I paid an expensive tuition to the University of Mt. Gox. In my bones I know that another massive bull market is coming and I want to strap on rocket boosters to the moon. But… I’m all in on BTC and if I skip any more meals to buy bitcoin I’m going to have to start wearing my spandex with a belt.
Ok, so I could lever up. But… I absolutely refuse to put any of my precious Sats on a centralized exchange. So like any good cypherpunk wannabe, I decided that code was my solution. Sovryn, the platform we are building, is going to offer two ways to make sure this bull run doesn’t leave you behind. We call them HyperHODLing and SuperStacking.
I don’t know exactly how far and how fast Bitcoin is going to go. But I do know the direction: Up. I want to put my money where my mouth is. I want to bet that if Bitcoin goes up, I get way more Bitcoin and if it goes down I get rekt. I asked Peter Schiff if he would take this bet and he ghosted me. So instead, Sovryn will allow me to lever up with margin trading. That means that using my bitcoin as collateral, I can borrow more bitcoin, up to 5X more, for my trade. If Bitcoin goes up 100% in price (which it will) I don’t just have 1 bitcoin worth twice as much. I have 5 bitcoin worth 10X as much (minus interest).
Ok, but there is a risk. What happens if the price goes down before it goes up? Sovryn margin positions are perpetual, you can hold them for as long as you want (you don’t need to know exactly when the market will moon, just that it will). In order to hold the position if the market goes against you, you just need to make sure you have enough collateral (your margin must remain above 15%). You can do this by either taking a lower leverage position, or adding to your margin in the case of prices dropping. For example, if BTC is trading at $10,000 when you take out your margin position, then at 5X leverage you will be partially liquidated if the price drops below $9,200. However at 2X leverage you will only be liquidated if the price drops below $5750.
So when I am trading with leverage, where is the bitcoin that I am borrowing coming from? The answer is SuperStackers; users of the system who lend their Bitcoin to earn more Bitcoin. With Sovryn, all loans are overcollateralized, protecting lenders from the risk of default. As a lender you can steadily earn an ongoing income by putting your coins to work for you. The interest rate is variable, the more demand (relative to supply) there is for borrowing, the higher the interest rate that the system charges the borrowers and pays the lenders. So let’s say the annual percentage rate (APR) of interest is 6%. You can stack Sats and HODL at the same time by depositing your BTC into the lending pool. Even though it is in the lending pool, you still retain the right to withdraw it at any time. There is no 3’rd party custodian. Your keys, your coins.
If you are anything like us, you understand the importance of “not your keys, not your coins”. Until now, you had to ignore your better judgment and use a centralized service if you wanted to double down on the wisdom that got you into Bitcoin in the first place. Sovryn is here to make that dilemma a thing of the past. Keep control of your keys, and build your stack at the same time. HyperHODL for speed and big swings. SuperStack, for slow and steady.