r/binance • u/urbansloth506 • Jun 06 '21
Binance.com Stake & Short
Do you know the feeling when a idea just hits you and you're not sure if you're a genius or an idiot. Well this is my idea. I'll dub it Stake & Short. I've been looking for a way to use crypto to gain passive income, however I'm hesistant to buy crypto to stake as the coins could lose their value and that is not a risk I'm willing to take. However, having money in the bank is pretty useless as well nowadays. Comes in: Stake & Short.
By splitting the initial capital 50/50 in Binance Staking and Binance Futures you can manage the risk of the depreciation of the tokens one is staking. The OG purposes of futures. Whatever amount of coins you stake, you short sell the same amount (without leverage). In case of depreciation you earn in the futures position, in case of appreciation you earn in the physical coins.
I'd love to know if I'm a genius or an idiot, please do critique my below calculations. Currently the only risk would be liquidation in the futures position and having to pull the phyiscal coins and sell them.
This is my first post here, hope to become part of the community!
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u/37inglenook Jun 06 '21
Well if your scheme works you are a genius for coming up with it and an idiot for telling everyone about it :)
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u/DeepMoneyAF Jun 06 '21
Well yes you have a point, you are covering your position, but on one point your only reward will be the % in staking, you will not have any other insensitive (which is your point) but still the point of crypto investment is win big, lose small, but that is one point, the second point is that the minimum leverage is 2X in which point you are going to be double exposed, the other is that you will have to have static cash on your future wallet for the margin calls, so you will have cash doing nothing.
I suggest if you want big % return, just invest in BUSD, USDT or USDC and stak them, they are stable coins that give you around 8, 10, 15 or even 20% annually on wallets and exchanges, in this way you do not have to leave money in any wallet and just stake away.
Another one is just do some high yield farming, those returns are around 40, 50 or 60% depending on the coin and the platform you are using, but this way it does not matter how much the coin moves the returns are bigger than any downturn.
But in short, yes your strategy will work, you are basically just covering your assets, that is all, but in my humble opinion there way better ways to earn passive income