Those who short BitUSD, are actually expecting rise in BTSX, not drop. It is going to be very interesting to see how this unfolds, but this is the only chain that allows margin.
In other words those who short BitUSD are putting up their BTSX stake as a margin. It's like buying more BTSX with BTSX.
could someone explain this to me in other words and in a more detailed way please? I didn't understand how it would work
When you 'short' something, you are selling it, without actually owning it to begin with. A short also has a promise to buy back at a later time. This is called covering your short.
So when you short bitUSD, you are selling it with a promise to buy it back at a later date. With a short position since you don't actually own the item you are selling, some collateral is necessary to ensure you make good on your promise to cover at a later date.
In this case the collateral would be BTSX. So in shorting bitUSD, the system will hold some of your BTSX as collateral until you cover.
If you are shorting bitUSD you are betting that the price of bitUSD relative to BTSX will go down. If it does go down and you cover, by buying back the bitUSD you sold in your short. You will have made a profit by receiving more BTSX. (the difference between your sell and your buy)
if you sold at 1BTSX per bitUSD and you bought back(covered) at 1.10BTSX per bitUSD you would make the difference as profit (0.10BTSX) (This example show BTSX rising relative to bitUSD or bitUSD falling relative to BTSX. which is what you want if your shorting bitUSD)
So, in a way, you have used BTSX to earn more BTSX by shorting and then later covering at a lower price. Keep in mind that if the price goes against you, you may be forced to cover at a HIGHER price and lose some or all of you collateral.