Downside bet
How to benefit from the downside of an asset with one single transaction
Alice believes that the Bitcoin price will drop from its current level of $37’000. Shorting an asset the traditional way is pretty cumbersome as it involves four steps: 1) borrow BTC, 2) sell it for USD, 3) buy BTC back (at hopefully lower prices), and 4) give back BTC to the lender plus some interest. Alice wants a simple way to participate in the downside of BTC.
Alice could use the DIVA App to create short positions with one of the below example shapes.
⚙️ Pool configuration
The example configuration for the above three patterns
🤝Sell long position tokens
After the creation of the pool, Alex would sell the long position tokens and keep the short position tokens.
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