DeFi platforms are websites and apps that cut out the middleman by using smart contracts and the need to submit to KYC rules. All operations are automatically processed in a blockchain via software algorithms.
What Is Leverage Trading?
Leverage trading is a margin trading loan in which a trader’s own assets are combined with loaned assets. Meanwhile, the trader’s assets are used as collateral, and the crypto credit loan comes not from brokers but rather directly from decentralized crediting protocols.
How to Leverage Trade and How Great the Profits Can Get
In starting a margin trade, the trader chooses the leverage amount that they’re happy with and then freezes a portion of their assets for collateral. Leverage is characterized based on a personal capital-loan ratio. In other words, if a person decides to start a transaction with 2x Leverage for a sum of $1,500, they need to freeze 750 dollars as collateral.
Margin trading positions can be short or long. If you believe that the rate of a coin is going to fall, you open a short position. If, however, your prediction is more optimistic and, in your opinion, the price of the cryptocurrency will only go up, you open a long position.
It’s worth keeping in mind that in the event that this expectation isn’t met and the price of the cryptocurrency goes in the other direction, the trader will lose just as much as he would’ve gained. The creditor will not suffer as a result since smart contracts are programmed in such a way that all the assets are returned to the lender along with the compensation accrued. Meanwhile, loan transactions with extreme unprofitability are closed automatically.
Let’s check out the most popular platforms. Keep in mind that you should check out the platform by yourself and select the most suitable according to your preferences and the peculiarities of your strategy.
DYdX DeFi Platform: Up to 25X Leverage
DYdX is one of the best-known decentralized platforms operating on Ethereum smart contracts. As early as several years ago, the maximum Leverage only went as high as five times. Now, in light of the integration of StarkWare technology zkSTARKS and the transition to the new system Layer 2, the leverage ceiling has quintupled to 25X. There are quite a number of trading pairs on that exchange, with over 35 variations of crypto assets on the list of unlimited contracts.
On the website, scroll down on the page until you see the coins list. Choose the coin you want to trade! Then connect your cryptocurrency wallet from the following services:
- Huobi Wallet;
- Coinbase Wallet.
After that, choose a trading pair, mark your trade position (long or short), and indicate the amount of the order, leverage level, etc. If your prediction ends up correct and the cost of the coin drifts in the direction you expect, you’ll be able to make a decent profit thanks to the loan that facilitated your trade.
PERP DeFi Platform: 20x Leverage
PERP, or Perpetual Protocol, features a decentralized web app allowing unlimited contracts to be traded with vAMMs for each coin. The built-in reserve protects and supports virtual market makers.
Traders on PERP can trade with a 20x leverage regardless of their trading position, which can either be long or short. Virtual AMMs can be sold directly without the involvement of contractors. Thanks to the existence of contracts, this resource supports almost any assets, whether they’re EOS, BTC, XMR, ETH, LTC, XRP, ZEC, ERC-20, BCH, or regular gold or a fiat currency.
You can trade on Perpetual Protocol. Acquaint yourself with the terms of the agreement, place a checkmark that you agree, and click the Start Trading button. Then, just connect your crypto wallet.
The platform supports the following storage wallets:
- Wallet Connect;
- Coinbase Wallet;
- Torus Wallet.
After successfully connecting your wallet to the system, you can choose any trading pair, of which there are over 15 units on the site. Then, establish the Leverage and start trading. These trades can both make you rich or bankrupt you. It depends on how accurate your predictions regarding the trajectory of the cryptocurrency were.
SOVRYN: Up to 5x Leverage
Sovryn is a DeFi platform and part of the RSK network. On Sovryn, traders can trade without any intermediaries and complete KYC procedures. The resource contains its own SOV token, which satisfies the ERC-20 standard and is used in RSK.
Sovryn’s functions are based on smart contracts. The Leverage that a trader can use is up to 5x. A total of 8 trading pairs are provided for this type of trading: BPRO/DoC, SOV/BPRO, SOV/XUSD, RBTC/DoC, SOV/DoC, BPRO/XUSD, RBTC/XUSD, and SOV/RBTC. To avoid the position being partially liquidated, a margin level of 15 percent or more must be supported.
To start leverage trading, you need to go to its website and click the Connect Wallet button in the upper right-hand corner of the trading menu. Choose whatever option you like best!
Here are the wallets you can connect to Sovryn:
- Hardware wallets (Trezor or Ledger);
- Mobile wallets (Defiant, Math, D’cent, Rwallet);
- Browser wallets (Portis, Liquality).
MetaMask support is also labeled on the main page of the exchange, but it appears to be temporarily disabled.
After you’ve connected your crypto wallet, you can now start trading. Choose the trading pair that suits you best, set up the parameters, and trade! For some trading pairs, the system sets the Leverage automatically, while for others, it can be regulated by the trader manually with the help of a slider (from 2x to 5x).
Mango Markets DeFi Platform With 20x Maximum Leverage
Mango Markets is a DEX exchange based on the blockchain Solana. It can be used to give and take crypto asset loans as well as leverage trading. The platform features quite a rare option: a trading system in the website interface is implemented in the form of a limit order book. Meanwhile, the other decentralized exchanges use an automatic market makers exchange function with a constant product.
Mango Markets offers its users spot trading with 10x Leverage as well as futures with similar 20x Leverage.
To trade on the platform, connect your own crypto wallet, and create a local account. The exchange supports the following varieties of storage:
- Huobi Wallet;
After connecting your wallet to the exchange, register a profile. You will also need to enter a small 0.035 SOL (a bit more than a dollar) deposit. Now you can leverage trade. Choose the trading pair that you’re interested in, set up the parameters, and voila! If you’ve studied the market situation well and acquainted yourself with the predictions of other analysts beforehand, you have every chance of trading for a profit.
DeFi Platform LEVERJ: Up to 100x Leverage
LEVERJ is a decentralized crypto exchange that allows futures to be traded with 100x Leverage. The platform operates using Gluon technology, which only operates at the speed of CEX resources. However, it meanwhile gives users absolute control over their monetary instruments.
There aren’t too many trading pairs on LEVERJ, but it features all the main pairs:
You can start margin trading by pressing the start trading button. But that’s just the first step. Then you need to connect your MetaMask wallet to the website in the form of a browser extension. After that, you can choose your trading pair and get straight to the actual trading.
Indicate the necessary settings, move the leverage slider to the credit level you want, and start trading! If you have some luck and your predictions prove correct, you will be able to make a profit.