An interesting anecdote:

A few nights ago, a friend in a communication group asked if you would short TST. Someone replied that since there is no contract, how can you short it? I replied that you can sell the currency with leverage and then buy it back. The essence of shorting is to borrow and sell the currency, that is, you borrow TST currency from me, you sell it at the market price or limit price, and wait for the price to fall or rise before you buy back the TST currency and return it to me. From our perspective, there is only a loan relationship between us for the currency TST, that is, I lend you the currency, and you need to return it to me (with interest). If the price falls, you can buy back the currency at a lower price to repay the currency you borrowed from me, and you make money; if the price rises, you need to buy back the currency you owe me at a higher price to return it to me, and you lose money.

The essence of going long is to buy a currency or asset. If leverage is used, it is essentially to borrow U to buy currency (taking Bitcoin as an example). If you borrow USDT from me to buy Bitcoin, then there is only a loan relationship between you and me regarding USDT. When the price rises, you sell Bitcoin at a higher price to repay the U you owe me, and the rest is profit. When the price of Bitcoin soared, the annualized rate of return of USDT's current account financial management was frighteningly high, at 20%+. In fact, it was because too many people borrowed U to buy Bitcoin, which pushed up the current interest rate.

Regarding the interest on borrowed currency, take the aevo I bought heavily in April last year as an example. I bought aevo heavily at a relatively low point (about 1.4-1.5), and then I went to the current account. At that time, the aevo current account interest rate could have an annualized return of 10+, and I still felt that I made a lot of money. But then the price fell all the way, and I did not stop loss but added positions instead. The more it fell, the more I bought. Finally, I sold all my aevo positions at a yield of -75%. The current account interest rate of the currency was raised because many people borrowed the currency to sell short. In the contract, because there is a margin mechanism, leverage does not involve a real lending relationship. It is only based on your margin level that determines how many positions you can open and at what price level there is a risk of forced liquidation.