The decentralized finance (DeFi) boom is in full swing as cryptocurrencies with DeFi functionality have seen immense price growth. But if past cryptocurrency market cycles are anything to go by, you may (or may not) want to short DeFi coins at a point.
In this article, we look at how to trade DeFi futures on AAX exchange.
Decentralized applications (DApps) that provide blockchain-based financial services known as DeFi, are the hottest thing in the cryptocurrency space.
Over $7 billion has been locked in DeFi platforms according to DeFi Pulse, signalling immense interest and adoption in a short period.
Many analysts have questioned the DeFi boom’s sustainability and have even likened it to the initial coin offering (ICO) boom in 2017.
If past cryptocurrency market cycles are anything to go by, one thing is constant. That is, the cryptocurrency market is highly volatile.
This volatility means that despite positive price action by DeFi cryptocurrencies, it is possible that they may fall or reduce in value – and can do so suddenly and significantly.
AAX allows you to take advantage of this through futures trading. You can trade DeFi futures on AAX with BTC or USDT as collateral.
DeFi futures available on AAX are:
Compound (COMP) is a decentralized loan platform running on smart contracts. Lenders provide loans, and borrowers take out loans in a decentralized manner, where the supply and demand of the crypto asset determine the amount of interest paid.
On the other hand, ChainLink (Link) connects smart contracts and real-world applications. ChainLink ‘Oracles’ verify real-world data before recording it in a smart contract on the blockchain. ChainLink enables blockchain interoperability, which is essential for adoption.