Introduction & Disclaimer

Hello!

This guide is to help illustrate the NFT Leverage Strategy that I have utilized to realize better gains for myself and increase NFT project/company holder value.

Please understand that none of this is financial advice. You can get absolutely rekt using leverage and you need to DYOR. This is a guide merely to explain what I have done and how I did it to realize success. It may not work for everyone since there are many variables to consider. My sole intention for this guide is to help educate. It is only through the dissemination of information like this that our ecosystem will continue to grow and be a positive experience for newcomers.

Also, I want to disclose up front that I am an investor in Cardano Crocs Club. This guide is written using this NFT company as an example. However, this strategy may be adapted to many other great NFT projects/companies out there. I am not telling you that this strategy will only work with CCC. I am not trying to shill you this NFT collection. If you are interested in CCC after reading through this guide, you are free to do your own research on them (@CardanoCrocClub). 

Resources I used to complete this strategy:
Opencnft
Jpeg.store
FluidTokens
Discord
Eternl Wallet


Now, let’s get into it…


Introduction & Disclaimer

As you perform your analysis, it is important to understand your macro position. What is your total liquidity that you are able to unleash on a floor? If you do not have a little buffer built up (I recommend having enough ADA to buy the lowest 10-15 assets of a particular NFT collection you want to start with) it may not be the right time and that’s okay. You do not want to try to force this strategy to work. Save and bide your time until you are ready. 

[![Screenshot-2023-11-10-152633.png](https://i.postimg.cc/W1WpsPFZ/Screenshot-2023-11-10-152633.png)](https://postimg.cc/0zS1CFC5)

Now, I realize this image is a bit hard to see the dates relative to price action and volume but it is not really relevant for the point here. When you zoom out and look at the timeline of this NFT collection you can clearly see where the price/volume can go, it has longevity, and it was recently demonstrating a minor breakout. Other factors to consider–which are not reflected in this chart–this particular NFT project/company had a track record of consistently building, had very recently announced the hiring of two additional developers to their team, and announced the release of a new wallet-integrated poker platform within the next month (huge completion of a task on their roadmap). 

If you are able to identify an NFT project/company that satisfies most if not all of these factors, it may be a great place to start.


Identify a Buying Opportunity

Once you have your buying opportunity identified, you will want to begin your purchasing of the floor assets (working from lowest to highest).

[![Screenshot-2023-11-10-152906.png](https://i.postimg.cc/L6GvwJvg/Screenshot-2023-11-10-152906.png)](https://postimg.cc/BXcx1QrJ)

In this example, I was able to purchase 10 OG Crocs ranging from 140ADA to 172ADA (an average of about 160ADA per Croc). You can stop at 10 if you want to, I chose this number because you can bundle assets in groups of 10 on FluidTokens. The more you purchase at the onset (depending on floor thickness), may give you the highest return on your initial investment. 

For example, in this scenario pictured above–if I had stopped after purchasing only 10 of the floor assets, the floor price would have risen from 140ADA to 175ADA (the next listed OG Croc on the market). This means that if I were to take a loan out on these 10 assets at 100% collateral (10 * 175ADA = 1,750ADA), I would realize a gain of 150ADA, excluding any future interest and service fees from the loaning platform. (10 * My average price per Croc of 160ADA = 1,600ADA. 1,750 - 1,600 = 150ADA). 

However, let’s say hypothetically that the next 5 assets listed, if purchased, would increase the floor price to 200ADA. This would mean that if I were to take a loan out on the first 10 assets at 100% collateral (10 * 200ADA = 2,000ADA), I would realize a gain of 400ADA, excluding any future interest and service fees from the loaning platform. (10 * My average price per Croc of 160ADA = 1,600ADA. 2,000 - 1,600 = 400ADA). 




Purchase the Floor

On the landing page of FluidTokens, you will be presented with this view (as of 10.26.22)

[![fluid-Tokensview.png](https://i.postimg.cc/yNCgSZyK/fluid-Tokensview.png)](https://postimg.cc/RWGVkqYp)

Here, you can scroll through all of the available assets for loan, as well as view already funded loans at the bottom. After, connecting your wallet and clicking on the Borrow tab, you may select the loans you would like to collateralize. In this scenario, I used my 10 OG Crocs that I just purchased at an average price of 160ADA. The terms I set at the time were as follows: 


[![Screenshot-2023-11-10-153503.png](https://i.postimg.cc/cJDVKQfk/Screenshot-2023-11-10-153503.png)](https://postimg.cc/KKM9w3qt)

The floor price of Crocs at this time was around 250ADA because I had a bit of additional liquidity to spare on some additional Crocs and the increased volume and price action attracted some others to grab a couple quickly.

List the Asset(s) on a Lending Platform

Once I was able to get my loan funded. I was able to leverage my new liquidity generated by the loan to complete steps 1 & 2 again. Purchasing additional floor price assets from this point (assuming no negative price action since your first set of purchases) not only increased the value of the collateral I provided to my first lender–which builds trust and is important to this process–but it further increased my potential gains as my average price per Croc continued to differ more from the floor price.



Focused Capital Can Make Waves

At this point, I decided to sell a single Croc for 248ADA to cover the cost of any interest and service fees I would need to pay at the maturity of my first loan. Since my first Croc was 140ADA this was a decent profit of 108ADA or 77%.

In addition to selling the single Croc, my strategy here was to list all of the second set of floor purchased Crocs for loan, as well. Depending on your macro position, you can either take additional profit and repay your loan(s) to exit. Or you can continue this process to gain additional leverage.

Either way, repaying your first loan at this point will be easy seeing as how the total cost to repay the amount borrowed + interest + fees should be significantly less than the floor price of the asset.


Take Profit or Increase Leverage

The steps outlined in this strategy can be completed as many times as you want (depending on what buying opportunities you are taking). It is important to remember that–at any point–you can flip to another NFT collection that you feel is now a better opportunity to leverage. You never have to focus on a single NFT project/company.

When you are ready to start reducing your leverage, you can slowly sell a few assets at a time and/or re-loan for a reduced ADA amount. Over a period of time, this will allow you to exit with the majority of your gains intact.

My hope is that most if not all of you found this guide useful. I wish everyone the best of luck if they decide to implement this strategy.


***I will be releasing a new updated version of this course to incorporate new advancements in Lending & Borrowing since 2022, in the near future!***

Final Notes

2022

**Overview:**

Join $decimalist, an experienced NFT investor, in this exclusive course where you'll learn the ins and outs of NFT leverage to maximize your investments. This course offers a deep dive into the strategies used by $decimalist in 2022 to realize significant gains and grow his NFT portfolio value from 10,000 ADA to over 300,000 ADA in a period of 4 months.


**What You'll Learn:**

- Understand the intricacies of NFT leverage and its potential risks.
- Discover how to identify prime buying opportunities within the NFT market.
- Learn the art of purchasing floor assets and utilizing them for leverage.
- Strategies for listing assets on lending platforms for optimal returns.
- Tips on advertising and building a reputation within the NFT community.
- Methods to effectively use funded loans and increase leverage.
- Insights on how to take profits wisely and manage your NFT portfolio.

An in-depth analysis of how NFT Leverage Trading is done.

NFT Leverage Trading 101

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