This article is for general information purposes only and isn’t intended to be financial advice.
Liqdnft.com is a decentralized peer-to-peer NFT lending platform where investors can unlock the value of their NFTs without selling them.
Smart investors and market actors can use Liqd in ways to generate both passive income and find short term investment opportunitíes.
In today’s article, we will show how Liqd platform can be used to short ETH and make a substantial amount of gains without risking any NFT assets.
But first things first,
What Is Shorting?
Shorting refers to the practice of betting that the price of a particular cryptocurrency will decrease in value. In other words, it is an act of selling a security or crypto at a given price without possessing it and then purchasing it later at a lower price.
Also termed as short selling.
Short ETH on Liqd
When you lend your NFTs on the Liqd platform, you thereby receive a set APR in ETH for the duration of the loan. However, if you predict that the price of ETH is going to go down during the timeframe that the loan is active, you can use this opportunity to short ETH. This is because the APR is set before the loan goes active on the platform and this opportunity can be used to accumulate ETH as well as earn interest on your NFTs.
Day and Swing Traders Rejoice.
Essentially, shorting involves borrowing a certain amount of an ETH from Liqd, selling it immediately at the current market price, and then buying it back later at a lower price to repay the loan.
A successful short results in a greater acquisition of the token, which in this case is ETH.