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Long/Short Position Deposit

What is Long/Short Position Deposit?

KLAYswap's long/short position deposit is a service that allows users to open long/short positions on the on-chain using leverage. Based on the assets they deposit, users can open long or short positions no less than three times for a specific token, and can profit by the difference between asset price at position opening and asset price at profit realization. Moreover, depositors can actively respond to market volatility even in an on-chain environment, since short positions can continuously pursue profits even in declining markets.
Furthermore, KLAYswap's long/short position provides secure account management and high profitability by depositing both assets deposited by users and assets secured by opening each position into a single pool, thus acquiring additional deposit interest and KSP reward, the deposit boasts high profitability and safe account management.

Features of Long/Short Position Deposit

  • Opening Positions Based on Stable Assets Only stable tokens such as USDC, USDT, and DAI can be used to open long/short position on KLAYswap. Depending on the dollar conversion value of the stable token deposited by the user, the position can be opened up to three times to generate stable profit.
  • User’s Asset Portfolio Diversification Users can also open long/short positions on the chain based on a single pool of KLAYswap to diversify their digital asset portfolio and gain new profits.
  • Safe Asset Management &Return Maximization The assets deposited by users are deposited in a single pool to receive interest on deposits and receive KSP rewards. This allows users to manage assets safely and maximize returns.

Asset Utilization Ratio Management

An asset utilization ratio is defined as the ratio of users’ utilized assets to their total deposited assets. For safe asset management, users should make sure that the asset utilization ratio does not exceed 90% when using long/short positions. In case this ratio is exceeded, returning the assets to be returned (utilized assets) may be difficult if their prices change sharply. Therefore, when the asset utilization ratio exceeds 90%, users’ deposited assets are automatically returned, and the remaining assets are available for withdrawal after the return is completed, excluding the 20% return fee.
In order to prevent automatic returns, users have to 1) add deposit assets in '0x' state or 2) return some of the assets they are using, and ensure that the asset utilization ratio does not exceed 90%.
Management of asset utilization ratios and automatic returns is necessary for securing protocol stability and ensuring smooth asset usage for long/short position users. The stable return on assets in a single pool helps depositors have faith in the system, which would in turn lead to more deposits, which would enable the supply of single pool assets to increase.