Lever up your EOS with Equilbrium & Newdex

July 17, 2020
Lever up your EOS with Equilbrium & Newdex

We at Equilibrium are pleased to introduce a new product to you. It’s called pyramiding. Sound familiar? It should! First, let’s take a step back and look at this proven strategy to see how we’ve innovated and improved it.

In classical market trading, pyramiding is a technique that has some very attractive aspects. The idea is simple: You make your trade — and if your predictions are correct, the trend continues in your direction and you earn profit, — then you reinvest that to continue to trade again and again on the same position, while continually readjusting your stop-loss in the direction of the trend. In this way, you minimize your risk, while progressively making more profit organically — by reinvesting what you earned previously.

In cooperation with our partner Newdex, we have developed a product to offer you the advantages of the pyramiding principle, while at the same time making it much more comfortable.

In classical trading, you watch the market and adjust your stop-loss and generally speaking it’s a slow method of increasing one’s position size. In pyramiding on Equilibrium, the process is fast and convenient, and liquidations take the place of stop-losses. Using Equilibrium, you can increase your asset exposure on one and the same trade by borrowing. However, as with any trading mechanism, you do have to continue to watch your positions to maintain sufficient collateralization and avoid loss.

The more collateralization you offer, the more you reduce your risk, while you add leverage. If you reduce your collateralization, you can grow leverage faster, but you also increase your risk. This inverse relationship allows you to control your accounts similarly to market conditions but in a more convenient way.

Users also have the option to work backwards with the same logic to deleverage their position and get rid of debt. In the absence of EOSDT, a flash loan can be used for this, which is done with a single blockchain transaction. You progressively pay back a portion of debt, take out collateral, sell it, and repeat the process.

Lever up your EOS with Equilibrium’s Pyramiding!

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