Fulcrum is a protocol that allows traders to trade on margin and that means you can multiply your asset within a short time or long time but there are a lot of risks involved. For instance, the price of Ethereum is at $3,000 and you buy an Ethereum worth $1,000 in a 4x long hoping the price of Ethereum will go up. Unfortunately, the price of Ethereum when from $3,000 to $4,500, which is a 50% increase and that means you earn a 200% return on investment. 50% multiplied by 4 gives us 200%. You made an extra $2,000. There are times the market might not work in your favor. For example, the price of Ethereum is at $3,000, and buy $1,000 worth of Ethereum at 4x long but unfortunately, the market dropped about 25%. -25% × 5 = 125%.
In other words, your asset has been liquidated when the price of Ethereum dropped about 20% and that means another investor claimed your money. What is all about is that you creating a leveraged trade that could multiply your money depending on the rate you set it, it could be 2x or 4x or 5x.
It is simply when a trader thinks the crypto is going to go up and you can be created it when a trader borrows and lead two assets. Assuming the price of Ethereum is about $2,000 and you end up buying $2,000 worth of Ethereum of it. You can use that $2,000 worth of that Ethereum to borrow up to 80% of any crypto we have. Now that you have deposited your Ethereum as collateral, you can buy USDC or any coin up to 80% of the value you deposited. Fulcrum platform will be owning you 1 ETH and you are owning Fulcrum $1,600 of your USDC.
You use that $1,600 to buy ETH and deposit it into the Fulcrum platform to borrow your other USDC up to 80%. If the price of Ethereum goes up, would make a profit but if the price of Ethereum goes down, you might get liquidated. Fulcrum would liquidate your position if the price drop to make sure you do not run away with the asset. You can manage your risk by one doing it because if you do it once you will have the chance of not getting affected if the price of Ethereum goes a little bit down.
This is when the value of your crypto goes up when the value of other crypto goes up and that means you will do the direct opposite of the long position. You would have to deposit USDC to borrow Ethereum in the Fulcrum platform. If the price of Ethereum drops, you will earn more profit, and also when the price of Ethereum goes down you will get lose your asset.
Fulcrum has a way for people to invest in their platform without even borrowing and the investors earn a profit on their money. You money that the investors provide is loaned out to people who might want to trade margin. Fulcrum has a different interest rate for margin position, 4x margin trade interest is trade.
- Crypto Insurance
Fulcrum has crypto insurance and that means you can buy crypto insurance on the platform. If have any issues in the future about assets, the insurance protocol will help you out.
- No KYC
They have KYC and that means you can carry your trade without KYC.
- Audited
The platform has been edited and that means there is a bug in their code. Since it is audited, you can trust the platform.
I will like you to know that the Fulcrum platform is a tool that was developed by the BZX protocol. BZX protocol has its special tool and token as well. Fulcrum is a lending platform called torque and they also have a governance token that allows an investor to stake their token in other to be part of the decision-making of the platform.
https://twitter.com/special78122/status/1555989035734257669?s=20&t=qeeF6x6st7g0K3DynJ0-mQ
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#steem-on 💙
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