Quick summary: Our recommendation is to use eToro to short Balancer. They have the most popular cryptocurrencies on offer, great support, and have an easy system for shorting cryptocurrencies in general.
While there are a lot of options out there for buying BAL, shorting is a different story. Luckily for us here in Australia, we do have a few crypto brokers and exchanges that allow for CFDs and shorting.
One of those brokers is eToro, which we’ll be using for this guide. Let’s get started!
How to Short Balancer in Australia
A quick recap first on what shorting actually is: The main objective of shorting or short selling is to make a profit (of course). The idea is to sell a stock/cryptocurrency hoping it will drop in value so you can buy it back later for cheaper, thus creating a net profit.
Shorting Balancer can be done in 4 easy steps:
1. Choose a cryptocurrency exchange
As mentioned before, for this guide we’ll be using eToro as they offer the ability to short the most common cryptocurrencies.
You can, of course, use any other crypto broker to follow along, they all work very similarly.
2. Create an account on the crypto exchange
Let’s start with just signing up with eToro.
The sign-up process is very quick, as is the verification that needs to be completed afterwards so you can get started.
3. Funding your account
Next is funding your account. You have several options when it comes to depositing AUD into your eToro Account. These include a bank transfer, credit card, debit card, PayPal, and more.
4. Short Balancer
Now for the actual shorting:
- Starting off at the search bar at the top, find Balancer by entering the name or symbol.
- Then on the crypto page/section, on the right side, hit the TRADE button to enter the trading interface.
- At the top of the trading interface: Click on sell to short sell the stock.
- Enter the amount for which you want to sell Balancer and click on “Open Trade”.
Once you’re ready to close the trade, hopefully when the value of Balancer has dropped, go to your Portfolio, find the Balancer trade, and click on the red cross to close the trade.
If your assumption/prediction was right, then the profit will be added to your account after closing the trade. If you were wrong on the other hand, you’ll incur a loss which will be debited from your eToro account.
Congratulations, now you know how to short Balancer!
Disclaimer: Trading, investing, and dealing with digital and cryptocurrencies might involve a lot of risks. Their prices are volatile and performance is unpredictable. Their past performance is no guarantee of future performance.
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Where to Short Balancer (BAL)
Aside from eToro, the other major exchange you can use is Binance.
While Binance tends to be a bit more complex compared to eToro, they do have more cryptocurrencies on offer.
Frequently Asked Questions
Can I short Balancer on Binance?
Yes, you can short Balancer on Binance. They have over 300 cryptocurrencies on offer and specialise in the crypto market. They also have a great app and competitive fees.
BAL is the governance token of the Balancer Protocol. It can be used as a voting token to approve or reject proposals, and it can also be used to direct the direction of the protocol.
BAL has a total supply limit of 100 million tokens. 25,000,000 of these tokens are reserved for the founders, core developers and advisers. The remaining 25 million are distributed to investors. Liquidity mining will distribute the rest to the community.
Balancer, a multi-token automated marketplace maker (AMM), functions as an self-balancing weighted Portfolio protocol. The Ethereum network is what Balancer is built upon. It allows anyone to create liquidity or add liquidity into customizable pools, and to earn trading fees. Balancer's generalization formula is more flexible than a traditional constant product AMM model. It can be adjusted to any number or weight of tokens.
It is similar in concept to an index fund. Assets are periodically reallocated based upon the returns and prices of assets. A common financial instrument, an index fund, helps investors achieve risk diversification through controlling their exposure to a portfolio. Balancer is a smart contract platform that solves the same problem as a portfolio manager.
Balancer can be used by two types of users: liquidity providers, and traders. These are the liquidity providers who have Balancer pools, or take part in shared pools. ERC-20 tokens are traded on the open market by traders.
With no complicated or costly rebalancing required, liquidity providers can allow controlled exposure to various crypto assets. In addition, liquidity providers can make passive income by using the ERC-20 coins that are not in use.
Traders are able to trade tokens and have access to many pools. They can also seek out profit by arbitraging prices on Balancer with other exchanges.
The Balancer Pool is the core component of the Balancer Protocol. The Balancer pool can be described as an automated portfolio that makes markets. Each token asset can be traded against other tokens within the pool. You could have three tokens in a pool: 25% SUSHI, 50% DAI and 25% WETH.
The purpose of a Balancer pool was to maintain the value function of each pool's weights or balances constant. To maintain the token's value, each token is rebalanced as the relative prices change.
A fee is paid by the pool owner for every trade that takes place in a Balancer Pool. The pool owner can adjust the fee by adjusting the trading volume.