Latest DeFi Product Simplifies Leveraged Ether Positions

March 18, 2021

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The latest Decentralized finance or DeFi product drive this point home, for good or for bad. The brainchild of Index Coops, which focuses to do for DeFi what Dow Jones and S&P did for the stocks, permits an investor to easily take a leveraged position on ETH with just a single transaction. 


The cooperative is launching its initial product, a token known as ETH2x-FLI, using its Flexible Leverage Index (FLI). It will aim for a value that goes up twice as fast as the second leading crypto. Leverage has been a killer utilize case for DeFi, starting all the way back along with the money market Compound. But hardly has to create such large bets required so less work. 


The Ethereum cost has moved from $400 in late November to contacting $2,000 as of late. For clients who trust it has further to go, FLI would be an approach to twofold down on such gains. ETH2x-FLI targets multiple times leverage, which implies the holder ought to get double the additions when ETH goes up and twice the losses when it goes down, yet not generally. 


Toward the back, ETH2x-FLI has done overall similar exchanges spread out in the models, which implies there’s a lot of security backing a lot of loans. In the event that the loans become undercollateralized, the collateral gets sliced, and that harms all holders of ETH2x-FLI. 


FLI utilizes an algorithm to ensure the guarantee. At the point when the algorithm will build its collateral position, which will diminish the leverage. By leaving adaptability around the measure of leverage, FLI can oversee risks. INDEX token holders will choose what else to make and when. INDEX Coop recently made the DeFi Pulse Index (DPI), which utilizes the Set Protocol is just as FLI does.


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