The short
How a short works here
- Post collateral. You put USDG into the market as collateral. It stays yours; it is what backs the loan.
- Borrow the stock. You borrow up to the LLTV of your collateral's worth in the stock, at the Chainlink price. At 77% LLTV, 1,000 USDG lets you borrow about 770 USDG worth of NVIDIA.
- Sell it. Sell the borrowed stock into the pool for USDG from the desk (the chain's Uniswap V3 router, 0.05% pool, quoted first). Now you are short: you owe the stock, you hold the dollars.
- Cover. Buy the stock back later, repay the loan plus the interest that accrued, and take your collateral out. If the price fell, the dollars you kept are more than the dollars it costs to buy back. If it rose, they are less.
The loan accrues interest every second at the market's borrow rate, which rises with utilisation. Interest is paid in the stock. There is no expiry and no recall: the position stays open until you cover or are liquidated.
Liquidation, plainly
If the stock rises until your debt is worth more than the LLTV share of your collateral, anyone can repay part of your loan and take collateral at a discount (the liquidation incentive set by Morpho, about 1.5% at 77% LLTV). You keep whatever is left. The liquidation price for a position is collateral times LLTV divided by units borrowed; the desk prints it beside every open position. A stock can gap through it at the open of the US session, and on a thin pool the price you get when covering can be worse than the oracle. A short can lose more than the collateral you posted only if bad debt is realised, which Morpho socialises across lenders, not shorts; but you can lose all of it.
The lend
Supply NVIDIA, Apple or SpaceX tokens into the market. Shorts borrow from that supply and pay interest into it; your balance grows in the stock. Withdraw whenever the stock is not all lent out; if utilisation is 100%, withdrawals wait until a short covers or the rising rate brings a lender in. Lenders carry the market's bad-debt risk described above. The desk takes nothing from lenders: Morpho Blue has no fee a market creator can set, so the rate the table prints is the rate you get.
Where every fee goes
- Market fee
- none: Morpho Blue lets no market creator take one; the desk earns the lender rate on the stock it lends, and 100% of that goes to holders
- Creator tax
- 1% on $BIGSHORT trades on Pons (2% with Pons's own): 50% holders, 30% seeds new markets, 20% team
- Payout
- Fridays 20:00 UTC in USDG, snapshot 19:00 UTC, minimum 1,000 $BIGSHORT
- Trading fee
- none; the desk charges nothing to open or close
What can go wrong
- The oracle stops. Our oracle refuses a price older than its heartbeat. Borrows and liquidations pause until it prints again; positions do not change.
- The pool is thin. Selling borrowed stock moves the price. The desk shows the pool's depth before you sell.
- The stock token halts. Robinhood can halt trading in a token during corporate actions; the desk prints the halt flag and Chainlink keeps the last price.
- A corporate action. Splits and dividends change the token's multiplier. Our oracle reads the registry's multiplier at deploy; a change is a correction on the proof page and a new oracle.
- The desk is late. The payout is a script run by a person. If it is late, the reason is posted on the Dividends page before 20:00 UTC.
- Nobody liquidates. On this Morpho every liquidation so far was done by a market creator's own bot. The desk runs one; if it is down, an underwater short sits until it is back, and lenders carry the gap.
- Morpho itself. The markets live on Morpho Blue, audited and immutable, deployed to this chain in May. We wrote the oracle and nothing else that holds funds.
Roadmap
- DoneMorpho Blue found on the chain, three markets designed (NVDA, AAPL, SPCX against USDG), oracles written and tested on a fork
- NextOracles deployed, markets opened, the desk lends the first stock and opens the first short so the table has a number before the token exists
- NextThe desk's liquidation keeper, running before a stranger's first short (nobody else liquidates on this Morpho; 96 liquidations so far, all by market creators' own bots)
- Then$BIGSHORT on Pons; first snapshot and payout the Friday after
- DoneSell and cover inside the desk through the chain's Uniswap V3 router, quoted before every swap
- ThenA distributor contract that holds the payout, so the promise is code, not a script
- ThenMore markets: any registry stock with a Chainlink feed, opened when a lender asks
- MaybeShort interest as a feed anyone can read, and a weekly printed edition
Questions
Is this Robinhood?
No. Robinhood issues the stock tokens and runs the chain. This paper runs a stock loan desk on it. Nobody at Robinhood has heard of us.
Can I short with a small amount?
Yes. There is no minimum. Gas on this chain is fractions of a cent.
What do I get for holding $BIGSHORT?
USDG every Friday: half the creator fees and all the interest the desk earns on the stock it lends. The Dividends page has the terms, the source and the ledger.
Why is the paper pink?
Because the good ones always were.
Can the desk recall my stock or freeze my short?
No. The markets are on Morpho Blue, which has no admin over positions. The desk can only add markets and change the oracle for new ones.
Who is the counterparty?
The market contract. Lenders lend to it, shorts borrow from it. No book, no broker, no locate.
What if nobody lends?
Then nobody can short, the borrow rate climbs, and the desk lends its own stock at that rate. Three tenths of the creator fee exists to do exactly this.
Is shorting a tokenized stock legal?
Borrowing a token and selling it is a loan and a swap. Nothing here is offered to anyone in a place where it is not allowed, and this paper is not advice; read the box below.
Does the desk ever touch my funds?
No. Your collateral and your loan are positions in a Morpho market under your own address. The desk's own address only receives fees.
Legal
BIGSHORT is a stock loan desk on Robinhood Chain built on Morpho Blue. Tokenized stocks are issued by Robinhood Europe and are not available to US persons. Nothing on this site is investment advice, a brokerage service, or an offer of securities. A short position can lose all collateral posted. $BIGSHORT is a token with no rights beyond what this site publishes; the payout is a published commitment by the desk, not a security. Do not use this site where it is unlawful to do so.