The Kraken cryptocurrency exchange has added a slew of new margin collateral currencies, according to a Wednesday announcement.
The list of new additions includes such altcoins as Ripple-affiliated XRP and Dogecoin (DOGE).
With the most recent additions, Kraken has almost doubled the selection of available cryptocurrencies.
As reported by U.Today, the major U.S. exchange added SHIB as collateral back in August, alongside such competing meme cryptocurrencies as Bonk (BONK) and dogwifhat (WIF).
Gamza KhanzadaevMargin trading allows users to make trades with borrowed assets. Exchanges require users to post collateral in order to trade with leverage. This type of trading is alluring due to the potential to amplify returns. However, it also comes with substantial risks.
Fiat currencies and stablecoins can also be used as collateral currencies on the Kraken exchange. The U.S.-based trading platform allows posting collateral in such fiat currencies as the Australian dollar (AUD), the British pound (GDP), the euro (EUR), the Swiss franc (CHF), the Japanese yen (JPY), the Canadian dollar (CAD) and, of course, the U.S. dollar.
Notably, Kraken does not require its users to match the collateral currency with a specific training pair.
Collateral currencies can dramatically differ in terms of the size of the haircut (the lower-than-market value of a specific cryptocurrency). TRON (TRX), Avalanche (AVAX) and Tezos (XTZ) have the biggest haircut of 30%. XRP, for comparison, has a haircut of 10%. Bitcoin (BTC), Ethereum (ETH) as well as the USD Coin (USDC) stablecoin have no haircut.
Vladislav Sopov
Gamza Khanzadaev
Dan Burgin
U.Today Editorial Team