Close Short Positions
Last updated
Last updated
The example above assumes that the MATIC 3x short position trader opened positions at 1 MATIC = 0.5 USDC, and after a year closed all positions at 1 MATIC = 0.2 USDC.
Following is the account status at the time a position is opened for the user.
1) Price of MESH at opening: 1 MATIC= 0.5 USDC
2) Earn USDC lending pool deposit interest on my asset 1,000 USDC (3.00% per year), Earn MESH reward.
3) Earn USDC lending pool deposit interest on position asset 2,911 USDC (3.00% per year), Earn MESH reward.
4) MATIC borrowing cost for borrowed asset 6,000 MATIC incurs (6.00% per year)
At the time of closing the position after 1 year, the account situation is as follows.
1) Price of MATIC at closing: 1 MATIC = 0.2 USDC
2) My Asset = 1,000 USDC *(1+0.03) = 1,030 USDC = $ 1,030.00
3) Acquired Asset = 2,991 USDC*(1+0.03) = 3,080.73 USDC = $ 3,080.73
4) Borrowed Asset = 6,000 MATIC*(1+0.07) *$0.2=1,284 USDC = $ 1,284.00
When requesting position close, the secured asset USDC deposited in a lending pool is first used to return the borrowed asset MATIC.
To return the borrowed 6,420 MATIC, 1,287.86359 USDC has to be swapped for MESH from the MATIC/USDC pool.
[Reference] Calculation of the quantity of USDC (x) needed to return 6,420 MATIC
1 MATIC = 0.2 USDC, 0.3% swap fee will incur during swap
x = 6,420/(1-0.003)*0.2 = 1,287.86359 USDC
Close the position by returning the 6,420 MATIC earned.
Partially returning the assets lets the user decide how many positions to close.
The following assets will be distributed to the user who has completed depositing short borrowing positions as described above.
1) My Asset 1,030 USDC (Deposit Interest + Earn 30 USDC)
2) Position Profit + 1,796.73 USDC (=$3,080.73- $1,284.00)
3) Additional MESH rewards from USDC and MATIC pool
