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  • Introduction
    • Mortgage product
    • Earn product
    • NEW! Refinance
  • How MortgageFi Works
    • Mortgage borrowers
      • Early repayment feature (ERF)
    • Earn - Liquidity Providers
    • Refinancing
  • Getting Started
    • Components
      • Mortgage Vaults
      • Earning Vaults
      • Loan NFTs
      • Defaults
      • ERC20 Integration
    • Points system
      • Liquidity Incentives
      • Referral Incentives
  • FAQ
    • General
  • MortgageFi Ecosystem
    • Contracts
    • Audits
    • Governance Structure
    • Integrate your own token
      • Integration Process
      • Benefits of Integration
      • Considerations
      • How to apply
    • Self-Balancing Protocol
      • Three Pillars
      • Protocol Design
      • How the System Balances
      • Security and Attack Vectors
      • Advantages of This Model
  • Under-Collateralized Loans
    • What are Under-Collateralized Loans?
    • Key Features
    • How it works
    • Risk Management
    • Benefits for Borrowers
  • Compared to other Lending
    • Use Case Example
  • Comparison Examples
    • Funding Rates and Position Stability
    • Zero-Sum Game vs. Mutual Benefit
    • Long-Term Holding vs. Short-Term Trading
    • Risk Profile
    • Costs and Predictability
  • Yield for Earn Vaults
  • Risk Management
    • Risk Management Strategies
    • Risks and Mitigations
    • User Responsibilities
    • Community Risk Management
    • Ongoing Risk Management
  • Strategies
    • Long vs Short-term Strategy
      • Long-term strategy
      • Short-term strategy
      • Comparing the Strategies
    • Hedge against the bear market
    • Cross-Chain Operations
    • Token Sink
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  1. Strategies
  2. Long vs Short-term Strategy

Long-term strategy

Key Features

  1. Early Repayment Option: Exit the loan before the first payment is due

  2. 1% Early Repayment Fee: Fixed cost for early exit

  3. Potential for Quick Profits: Capitalize on short-term price movements

How It Works

  1. Vault Creation:

  2. Token projects can create a dedicated MortgageFi vault for their token

  3. This vault allows users to borrow against the project's token

  4. Long-Term Borrowing:

  5. Community members can take out loans of up to 30 years using the project token

  6. Borrowed tokens are effectively removed from circulation for the loan duration

  7. Gradual Token Lock-up:

  8. As more community members take loans, a larger portion of the token supply becomes locked

  9. This process can continue over time, potentially for decades

Benefits:

  • Opportunity to profit from short-term market movements

  • Lower risk compared to long-term commitments

  • Flexibility to react to market conditions

Ideal For:

  • Experienced traders comfortable with flash loans

  • Users anticipating significant short-term price movements

  • Those looking to leverage MortgageFi for trading strategies

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Last updated 1 month ago