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Beta Finance Is Making the Short-Selling Convenient

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Beta Finance’s 2-Phased launch has started on August 18th, on Ethereum. With this launch, the users can now earn a high yield on their assets and access the integrated short selling experience. 

The launch has two phases: In phase 1, the users will be allowed to borrow, lend and short sell the assets only on Beta Verified Markets and in phase 2, the users will be able to create the money markets for tokens. 

Notably, Beta finance is the permission-less money market project to lend and borrow the digital assets incubated by Alpha Launchpad. It aims to facilitate more excellent stability in Decentralized finance and offset the crypto volatility by enabling the users to hedge risks via on-chain shorting. 

What is unique about Beta finance?

It is often noticed that the Shorting is missing in DeFi. Shorting indeed is a sort of counterbalance for the price volatility of assets. What Beta Finance aims is that they want the users to have an ability to be the opposing force for price volatility through a straightforward experience to short assets.

Also, this protocol will allow the majority of the actively traded crypto to earn more yield, which assets are otherwise neglected by other money market protocols. Hence, allowing the growth of money markets along with the development of DeFi space.

How does short selling on Beta Finance work?

The short-selling on Beta Finance is more or less similar to that on centralized exchanges except for few things. Beta Finance protocol routes the trade through decentralized exchanges that use AMM (Automated Market makers) technology, unlike other exchanges that use an order book to execute the short selling.

Also, the protocol doesn't use the funding rates, and the accumulated interest is repaid in a manner similar to that of Aave and compound finance.

The short sellers can use the supported collateral (USDT, USDC, DAI and ETH) for initiating the short positions on the protocol. Short selling means that the users can borrow a token on Beta and then immediately sell that borrowed token. It works in three steps:

  • Users are required to choose the token money market and then click the ‘Short’ button.
  • The next step is to enter the amount of collateral to be used and the amount of token which is to be shorted.
  • The step is to click the ‘Short’ after selecting the decentralized exchange. Notably, DEX, which is currently supported, include Uniswap V2, Uniswap V3 and Sushiswap.

What actually happens is that Beta Finance checks the sufficient collateralization and then borrow the token from the respective money market for its users. That particular token is then swapped through decentralized exchanges to the collateral token, and then the swapped collateral token is staked with the principal collateral token.

Closing thoughts

Beta Finance Protocol enables the users to access the scalable money market and also allows them to short sell easily. The protocol provides the users with a 1-Click Short tool where the users just need to enter the amount of token and collateral.