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- 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 against 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.
- 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 ZKSync and Linea.
- Each network deployment is native within its own chain, and is expected to have its own utility token within the respective network.
- Traders are charged a swap fee of 0.1% on executed trades and a 10% performance fee on reward tokens generated by the trading collateral.
- 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.
- Chainlink USD-denominated price oracles are used in calculating collateral values.
- Users can use multiple wallets to "isolate" the collateral, creating the same effect as isolated margin.
- 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.
- Traders' trade portfolio and collateral are fully liquidated if trading losses exceed the liquidation threshold.
- 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.