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Decentralized Financing (Defi) However, defi also has a number of reaps, In this article we will examine the concept of short positions, price campaigns and potential dangers in defi.
What is a short position?
A short position If the Price Drops, you can sell your borrowed assets to make a profit. .
Price actions in defi
Price campaigns relate to the fluctuations in asset prices over time. In Defi, price promotions are often due to market feelings, regulatory changes and other external factors. For example:
* Pump and garbage schemes
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* Market Manipulation : Supervisory authorities can try to manipulate market prices by buying or selling assets on artificial trends. This can lead to price volatility and instability.
The Risks of Short Positions in Defi
In defi, short positions are particularly dangerous due to the following risks:
* Liquidity risks
: If the value of a borrowed asset decreases, you may have difficulty selling it again with a profit, which leads to significant losses.
* Counterparting risks : Counterparties that are involved in short positions can become failure or insolvent and investors expose potential liabilities.
* Market volatility : short positions can increase price movements and make them more volatile and unpredictable.
Price Campaigns and Short Posits
Price Actions Can Tighten Short Position Risks By:
* Reinforcement Price Movements :
* Create Market Feelings : Pump and dump schemes or market manipulation can create trust and the prices can be increased even if the underlying assets do not cut off well.
Mastive of Risks: Best Practices
How to Minimize Risks When Using Defi Platforms:
- ** Carry out thorough research
- Use margin protection : use marginal protection mechanisms to lie your loss
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- Stay up to date :
Diploma
Decentralized Financing Offers Investors exciting opportunities, but it is important with short positions and price campaigns. Best Practices, You can minimize your exposure to potential losses and navigate with confidence by the world of defi.