Beta Finance Just Listed SHIB!

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Beta Finance just listed SHIB!

What is Beta Finance?

According to Beta Finance’s website, the company believes in "Open Finance For All" and that its goal is to reduce the volatility in Decentralized Finance (DeFi) by creating infrastructures and tools to allow market efficiency.   

Beta Finance is a protocol that runs on Ethereum Mainnet and Avalanche C-Chain networks.  Beta Finance is a money market that allows DeFi users to borrow, lend, and short cryptos. Crypto asset prices are very volatile with prices moving up and down often, and BetaFinance has created a collateral model to fit this volatile nature.  The collateral model that they created is called the isolated collateral model. With this isolated collateral model, you will only lose or get liquidated for what you have allocated to a specific crypto that you shorted. For example, a user decided to put up 100 ETH as collateral, with 50 ETH allocated to borrowing $SHIB, and 50 ETH allocated to short selling $BTC; and if $BTC moons (goes up) significantly, the user will only risk of losing (get liquidated) the 50 ETH allocated to $BTC, not the 50 ETH allocated to $SHIB.  There is no cross-collateralization with this isolated collateral model.

On Beta Finance, lenders are able to earn risk-free high yields, borrowers can borrow cryptos with ETH or Stablecoins that they hold as collateral, traders can short sell any crypto with their ETH or Stablecoins as collateral, and liquidators can earn rewards “for monitoring and liquidating under-collateralized positions”.

Now that SHIB is listed on Beta Finance, people who want to short SHIB can technically do so. However, SHIB short sellers are at risk of short squeeze because the SHIBArmy is big and strong, and if the SHIBArmy piles in to do a short squeeze, SHIB short sellers will feel the pain and lose big.  This was what happened to the now famous GameStop stock where short sellers lost billions.

Disclaimer: Our articles are for educational purposes only and NOT financial advice. For your own personal investment decisions, please do your own research and consult a financial advisor. Good luck investing.

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