LeverFi
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Product FAQ

General

Is LeverFi a PvP protocol like GMX? Why not?

  • When users enter a trade (e.g. long BTC), the BTC is actually purchased on the liquid secondary market via decentralized exchanges. This makes LeverFi a non-PvP protocol, and Lenders (liquidity providers) on LeverFi are not a trade counterparty to Traders.
  • In contrast, liquidity providers on PvP protocols absorb capital losses in the event that traders are net profitable. The PvP model effectively pits liquidity providers and traders in a zero-sum game within the protocol.
  • A non-PvP design removes a key conflict of interest between Lenders and Traders on LeverFi, because it allows for win-win outcomes to take place. Traders can be net profitable on their PnL, with Lenders earning their deserved yield at the same time.

What are the protocol fees for using the LeverFi protocol?

  • The LeverFi protocol charges a swap fee of 0.1% on executed trades and a 10% performance fee on reward tokens generated using the protocol.

What networks are supported?

  • LeverFi is deploying on Ethereum as the first supported network.
  • After Ethereum, LeverFi aim to support EVM-compatible networks such as BNB Chain and Polygon, and also new upcoming networks such as Aptos and Sui.
  • Each network deployment is native within its own chain, and is expected to have its own utility token within the respective network.

For Traders

How do Traders earn yield on collateral?

  • Traders are required to deposit collateral before trading.
  • Collateral deposited is redeployed to earn reward tokens in other DeFi protocols such as Convex, Aave or Stargate.
  • Traders can claim their reward tokens earned anytime within the LeverFi platform.

How is the value of collateral calculated?

  • Chainlink USD-denominated price oracles are used in calculating collateral values.

Can I use isolated margin instead of cross margin?

  • Users can use multiple wallets to "isolate" the collateral, creating the same effect as isolated margin.

Can I withdraw my collateral if I have trading losses?

  • Traders with a net negative profit and loss (PnL) account will be capped on collateral withdrawals.
  • Traders can withdraw their collateral in full after repaying debt to the lending pools.

When will a Trader be liquidated?

  • Traders' trade portfolio and collateral are fully liquidated if trading losses exceed the liquidation threshold.

For Lenders

How do Lenders earn yield?

  • When traders leverage trade on LeverFi, they are borrowing funds from the lending pools funded by Lenders.
  • Traders pay Lenders a floating borrow rate, which is subject to the utilization rate of the lending pool. Higher pool utilization result in higher borrow rates.
  • Borrow fees accrued directly into a Trader's borrowed position, and are paid into the lending pool when the Trader repays the borrow.