Time Horizon
Years to decades
Days to weeks
Risk Level
Lower, spread over time
Higher, concentrated
Profit Potential
Gradual, long-term appreciation
Quick, market-driven gains
Repayment
Regular, scheduled payments
Single lump sum repayment
Long term strategy if you:
Believe in the long-term value of the asset
Have a stable income for regular payments
Want to build a significant crypto position over time
Long Play: Default risk over an extended period, potential opportunity cost
Short Play: Market volatility risk, potential to lose deposit if you default on your loan, timing challenges
Both strategies have their place in MortgageFi, offering users the flexibility to approach crypto asset acquisition and trading in ways that best suit their goals and risk tolerance. Users are encouraged to carefully consider their financial situation, market knowledge, and risk appetite when choosing between these strategies.
Short term strategy if you:
Are experienced with DeFi and watch the market for regular price movements
See a short-term opportunity in the market
Are comfortable with higher risk for potential quick gains
Best Market Condition
Steady or gradually increasing
Rapidly increasing
Primary Goal
Asset accumulation
Short-term profit
Below describes how to take advantage of MortgageFi with a short-term profit strategy, enabling quick gains in a volatile market.
Early Repayment Option: Exit the loan before the first payment is due
Use the PnL indicator on the dashboard to identify when your position is in profit
Escape the fear of margin calls and liquidation risk as a result of market price volatility even with the high leverage we offer (up to 50x)
Create a loan:
When you think the asset is undervalued by 2% or more create your loan, securing the price at that moment within your mortgage. Be sure to check the price at which MortgageFi is lending you the asset which is displayed when you create the mortgage contract.
Whilst we offer loans with 2-50x leverage we recommend taking the full 50x leverage for the short-term strategy since it offers the most potential for maximum gains.
Benefits:
Opportunity to profit from short-term market movements
Up to 50x leverage with the risk of liquidation as long as users keep up their repayments
Lower risk compared to long-term commitments
Flexibility to react to market conditions
Risks:
Failure to pay before the first instalment is due (45 days) will result in the loan defaulting
Ideal For:
Experienced traders comfortable with flash loans
Users anticipating significant short-term price movements
Those looking to leverage MortgageFi for trading strategies
Watch for when your position is in profit:
The MortgageFi dashboard provides a convenient way to see if you are in profit with the PnL indicator beside your loan listed in the dashboard.
If within 45 days before your first payment is due the price moves up more than 2% you can act to take profit on your position
If you want to verify the PnL manually: Be sure to check the base price at which you acquired the asset in your mortgage (this is visible in the 'loan info' tab in the dashboard. The internal pricing mechanism within MortgageFi means that the price at which you locked into your mortgage may have varied from the market price at the time. This price is clearly visible when you create your loan.
When you are in profit use the early repay feature to settle the loan
Once you've repaid the loan in full you'll receive the amount of the asset you borrowed additionally the initial deposit will be returned to you.
If the amount of funds required to settle the loan is larger than you can afford you can either temporarily borrow the funds from another party, then pay them back straight after taking profit or you could use a flash loan (for more experienced users).
Sell the asset on the open market to realise the gain
Sell enough of the asset to cover the amount you needed to settle the loan and keep the remaining funds as your profit (or sell the whole stack to realise your profit in USD denomination).
The page describes how to use MortgageFi to leverage long term belief in the upwards price direction of the asset you mortgage.
Secure the asset (eg Bitcoin) at current prices for the long term
Make regular fixed USD payments to keep the loan from defaulting
Don't feel locked in, use the to lock-in profits at any stage of the loan term
As long as the market price of the asset appreciates at a higher rate than the rate the collective mortgage fees cost you can have piece of mind in your long term investment
Loan creation:
Head to the page to select the vault that offers the asset you wish to mortgage, checking how much is available to borrow
Selecting the vault using the 'Mortgage' button takes you to the mortgage page where you can type in the amount you wish to borrow. The lower half of the mortgage modal provides the information you should consider before creating your mortgage including, deposit required, monthly repayments and so on.
Make regular payments to ensure your loan does not default
We recommend users make payments once per month to ensure the loan will not default. There is an approximate 45 day timer that fully resets when a user pays the current outstanding amount due on their loan. Since the 45 days is measured in blocks it's unwise to pay every 45 days because discrepancies in how block timing works compared to days and hours.
There's no need to see your loan through to the end of the term. Use the early repay feature to realise profits along the way when it suits you.
Even if you're 10 years into your mortgage repayments the PnL indicator on the dashboard where your mortgage is listed take into account the current market price, the price you locked your asset in for on creation of the mortgage, the payments you've made so far and the early repayment fee. If your PnL is showing as positive (text in green) then you can exit your loan to realise profits.
What if the market goes into a bear cycle? Using the long term strategy as long as you're confident the market will recover into a significant enough bull cycle before your loan term ends any temporary losses (the mortgage position being in negative PnL) will recover, saving you from defaulting and losing any payments made towards the loan.
Learn about both strategies here
MortgageFi was designed to offer digital property loans that compare with trad-fi mortgages by allowing anyone to setup a mortgage for assets where they believe the long term value is attractive enough to own into the future.
By securing tomorrow's asset at todays prices users can take ownership of much larger amounts than they can afford to buy outright today.
The long-term strategy allows users who have a regular monthly income to make fixed USD denominated payments for the duration of the loan.
With the declining purchasing power of the US dollar the effective price users pay will likely decrease over time assuming the purchasing power of the dollar continues to decline
Designed for those who want to take advantage of the 50x leverage to exit their loan as soon as they are in satisfactory profit by utilising the
Unlike typical high leverage platforms users do not need to worry about the possibility of volatile downwards price action leading to sudden liquidations and margin call, as long as they keep up with their repayments