With the latest market downturn, many holders of DeFi tokens may have woken up to find their investments deeply in the red. Thankfully, a trading tool exists which can help reduce losses when these unexpected crashes occur.
What are DeFi stop-losses?
A stop-loss is an automated order, which traders set to protect them against losses. For example, a trader may wish to exit a position if it falls below 20% of its entry price, to avoid further losses if the price keeps falling.
Stop-losses will fill automatically, meaning a trader can sleep soundly knowing that the order will fill in case a token’s price crashes overnight.
When coupled with a sound trading strategy, stop-losses can be incredibly powerful, allowing traders to manage positions with little input. This benefit is increased further when stop-losses are used with other trading tools such as Limit Orders.
Stop-losses have been commonplace on centralised exchanges, but are only a recent development in DeFi, thanks to the Bogged platform. In this article, we'll explore how Defi stop-losses work on this platform and how to effectively use them.
How do stop-losses work on Bogged?
DeFi stop-losses on Bogged work just like a stop-loss on a centralised exchange, which some traders may be familiar with.
The Bogged stop-loss interface
Setting a stop-loss on Bogged is simple:
- Visit the Bogged stop-loss DApp
- Choose how much of your position to exit when the stop-loss is triggered.
- Choose the trigger price of the stop-loss
- Choose which output token you want when the stop-loss triggers
- Set token tax and order expiry (up to 1yr), approve the tokens and then set the order!
That’s it, simply set and forget! The Bogged platform will take care of the rest by closely monitoring the price and automatically filling the order. There’s no need for traders to keep any devices switched on, or connected. Note that tokens are not removed from your wallet until the order fills, so make sure to maintain a sufficient balance or the order will be cancelled.
Setting a Bogged DeFi stop-loss will cost $2.50 worth of $BOG (see below), or $3.00 worth of the native token of the chain you’re trading on (BNB, FTM, CRO etc)
Where can I use Bogged DeFi stop-losses?
Bogged Finance DeFi stop-losses will work for any token with sufficient liquidity for the trade, on the below DEXes:
BNB Chain (Binance Smart Chain)
- Elk Finance
- Elk Finance
- MM Finance
- VVS Finance
- Elk Finance
Can’t see your favourite chain/DEX? The Bogged Finance team is in the process of a cross-chain expansion which means this list is being constantly updated. Stay tuned for more!
Are Bogged DeFi stop-losses safe?
At Bogged fund safety is our top priority. As a platform with over $2 billion in total volume processed, we understand the need to maintain the trust our hundreds of thousands of users are putting in us.
We maintain this trust by partaking in thorough internal audits of all smart contracts that interact with user’s funds. The nature of utilising smart contracts also has the major benefit that they are completely transparent- our confidence in these contracts and our commitment to safety has led us to launch a comprehensive bug bounty program in partnership with Immunefi. This is alongside working with major auditing partners such as Certik.
When a trader places a stop-loss order, they grant a Bogged smart contract access to spend only the token being traded; Bogged cannot touch any other funds. If a user changes their mind about the stop-loss they can cancel the order through our interface, or revoke the approval using their wallet app, which prevents Bogged from ever interacting with the wallet again.
The Bogged token $BOG — Powering DeFi stop-losses and more
You may have noticed that stop-losses can be paid for in a token called $BOG. This is the Bogged governance token, and is used for payment across the platform. Using $BOG unlocks professional grade features, gives order discounts and it can be staked for a fair share of platform revenue - a novel way of distributing staking rewards. 75% of the revenue generated from stop-losses and other order types on Bogged are distributed to stakers. To learn more about staking on Bogged, check out https://app.bogged.finance/staking or see our Publish0x article.
The Bogged ecosystem — More than just stop-losses
Bogged also offer a wide range of DeFi tools not covered in this article, including;
- BogSwap DEX Aggregator A DeFi swap interface that offers users the best available trade price, every time, as well as advanced features. Read more.
- BogCharts A feature-complete DeFi charting platform including advanced analytics, contract analysis, token research and much more
- DeFi Limit Orders Powerful limit orders that work for any DeFi token
- Advanced Portfolio Analytics Get deep insights into your DeFi holdings
- Token Launch Sniper An advanced tool allowing traders to get in on launches early
If you’d like to learn more about the Bogged platform, please visit bogged.finance If you’d like to get in touch with the team or community, you can do so on Reddit, Twitter, Discord and our Telegram Group.