Margin Trading Made Decentralized
What is the Fulcrum protocol?
A platform that allows you to trade on margin, giving you the opportunity to have up to 5x your own money while using your own money. Sounds pretty sweet right? Essentially, you are created a leveraged position that allows you to multiply your own money. Now, using Fulcrum you will need to use your critical thinking skills to make sure that you are playing this correctly, otherwise you may end up in a bad deal.
How does Fulcrom work?
Fulcrum is the pivoting mechanism that holds up a lever. You might wonder what this has to do with the platform, but you will understand soon enough. Fulcrum can bring you big profits in a round about way of predicting what might happen next, much like making bets at the casino. While this seems like a great option, you may want to consider the types of risks that are involved to be able to make a decision that suits your needs the best.
Most people looking to use Fulcrum will be interested in utilizing a long position, meaning they are banking on a specific market going up in value over a period of time, this way you can borrow against your current assets and pay the loan back with your earnings. In some cases, there are times when the asset actually goes down, which would be considered a bad deal, and you can end up liquidated.
The entire process runs off of smartcontracts which are simple to use and are quick to initiate, unlike with traditional finance and lending. Smartcontracts are automated and permissionless, so you won’t need to rely on a human to process your borrowing or lending transactions.
An insurance fund is an interesting feature which Fulcrum has, undercollateralized loans that are not liquidated to satisfy the balance, the lenders will be repaid from a pool that is taken from the interest of the borrowers by 10%.
Why choose Fulcrum?
There is no KYC – with anything financial these days, it seems the laws are tightening for those who transact in any kind of way. Here, a decentralized margin trading platform that doesn’t require verification or KYC compliance.
Non Custodial – you will always have complete and total control of your own keys and assets.
Tokenized – Margin loans will help you to earn interest on the borrowed funds alongside pTokens.
Liquidation penalties are lower – for those who get into a bad deal, the undercollateralized loans will only have a 15% to 25% maintanence liquidation.
To initiate a transaction, you will first want to surf around the site and check out the different tabs that are available. For trading or lending, you can choose either Ethereum, Binance or Polygon. Whichever one you choose will take you to a different page that offers detailed information about each blockchain. At the top of the page, you will see trade, lend, borrow, stake & farm, each tab offers a different world of opportunities.
Fulcrum is an excellent choice for those looking to trade cryptocurrency while borrowing against their own assets. The site has a great layout and offers all of the information necessary to get started, even if you’re new to crypto world.