🧩Cross-Margin

More Capital Efficiency! MORE!

One of the most important features of any portfolio system is the ability to cross-margin assets together. At Itos, we have the most sophisticated cross-margining system on-chain; we can handle both large-name blue-chip tokens and small no-name ones. We have token specific risk bounds, asset specific safeguards, and operational safeguards. As a result, our users can deposit any asset and any token as collateral.

By cross margining, you can hedge away some risks and utilize even greater capital efficiency. For details on the cross-margining system, see Cross-Margin Accounting.

Hedging Capabilities

You can utilize the cross-margin facility to avoid a number of risks. For example, you might be really confident that the ITOS token will take off, but then one day BTC dumps and that brings down the whole market. You might have been right, and ITOS might have done better than any other token, but still lost money because the whole market dropped. So instead you can long ITOS and short BTC. This allows you to hedge against any sudden market drops. And if the market goes up sure you'll lose a little in your BTC short, but the gains in your ITOS long will cancel that out. You're effectively betting on the outperformance of a certain token over another, and in the process you cancel out any shared risks.

Cross-margining is a powerful tool in expressing more targeted and nuanced investment beliefs, thus minimizing risks. Once those risks have been accounted for, a properly hedged portfolio can then look to lever up their positions.

Capital Efficiency

Typically collateral can only be a token and so collateral can only collect low lending yields. On Itos, we let you post any asset as collateral. This means you don't need a keep some tokens around doing nothing just to borrow against it. You can let them keep earning from any yields farms you're currently using and borrow against them. This improves the overall yield of your entire portfolio.