How Can a DAO Use Inverse Perpetual Swaps to Manage Risk on non-USD Denominated Assets? ▴ Learn

How Can a DAO Use Inverse Perpetual Swaps to Manage Risk on non-USD Denominated Assets?

An inverse perpetual swap is a contract collateralized and settled in the base cryptocurrency (e.g. BTC/USD inverse swap is margined in BTC).

A DAO holding a large amount of a non-USD asset, like its native token, can use an inverse swap to hedge the USD value of that asset. By shorting the inverse swap, the DAO locks in a future USD value for its base asset, effectively mitigating the risk of the base asset's price dropping relative to USD.

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