LeverFi allow users to engage in leveraged spot trading.
When users enter a trade (e.g. long BTC), the BTC is actually purchased on the liquid secondary market via decentralized exchanges.
Liquidity providers on LeverFi are not a trade counterparty. LeverFi is therefore not a PvP trading protocol.
We believe that a non-PvP design removes a key conflict of interest between liquidity providers and traders on LeverFi, and also reduce risks for liquidity providers in the event that markets start trending in a specific direction.
Earn Yield on Collateral Deposits
Traders are required to deposit collateral before they can start trading.
Collateral deposited into LeverFi is redeployed for yield on other DeFi protocols. Traders can claim the yield generated separately (non-compounding).
Traders with a net negative profit and loss (PnL) portfolio will be capped on collateral withdrawals until the outstanding debt is repaid to the lending pools.
Trade Execution and Settlements
When traders leverage trade on LeverFi, all the open trading positions are entered, stored and settled internally within the LeverFi platform only.
Traders using LeverFi do not have direct access to the trading assets, however, traders can withdraw trading profits if they have achieved a net positive profit and loss (PnL) portfolio.
LeverFi trades are natively routed through multiple DEXs for optimized trade pricings, allowing traders to execute chunky trades with low slippages.
Lenders Earn Borrow Fees
When traders leverage trade on LeverFi, they are borrowing funds from the lending pools funded by lenders.
A floating borrow rate is payable by traders to lenders, subject to the utilization rate of the lending pool. Higher utilization for lending pools will result in higher borrow rates for traders.
Borrow fees accrued directly into a trader's borrowed position.
Traders' trade portfolio and collateral will be fully liquidated if trading losses exceed the liquidation threshold.
The protocol charges a swap fee of 0.1% on executed trades and a 10% performance fee on all yields generated via LeverFi.
LeverFi aims to support leveraged trading capabilities for users on Ethereum and EVM-compatible networks such as BNB Chain, Avalanche, Polygon, Arbitrum, Optimism and more.
Ethereum will be the first network for LeverFi deployment.
Each network deployment is native within its own chain. LeverFi is not (yet) a cross-chain trading platform, but will be working towards a vision where multi-chain liquidity is aggregated and users can trade freely with low fees and low slippages.