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In Pluto Network Natural hedging,

Borrower does not need to bear risks of foreign exchange rates. For Bitcoin miners in Europe, their costs and fixed asset investment are denominated in euros, so the US dollar stable currency is very tasteless for them. Now, European miners can hedge against foreign exchange risks by collateralizing Bitcoin or Ethereum and lending EUX. This also applies to traders who settle profits in euros.

Snippets of Things you need to know about Pluto Network Whitepaper.

What is Hedging?

Hedging is a risk management strategy that traders use to offset investment losses. The act of hedging refers to taking a position opposite the current open position in a particular asset. Traders treat it as a form of insurance that protects them against a negative event’s impact on their investments. Keep in mind that hedging does not prevent adverse events from happening. Instead, it is a strategy that reduces the financial impact.
A natural hedge can also be implemented when institutions exploit their normal operating procedures. For example, if they incur expenses in the same currency that their revenues are generated they will actually reduce their exchange rate risk exposure, naturally.

Pluto natural hedging is a management strategy to reduce risk when it comes to foreign exchange when it comes to investing in assets in their own foreign currency.

John Joseph