Protocol Parameters
The leverage factor for borrowing margin liquidity is currently set at 5x. This is applied on the protocol level.
Leverage Liquidity Example:
- A Trader deposits $10,000 worth of trading collateral.
- At 80% LTV and 5x leverage factor, the leverage liquidity is $10,000 * 80% * 5 = $40,000.
- The max margin liquidity that the Trader can borrow from the Lending Pools for leveraged trading is $40,000.
The liquidation ratio for trading collateral is currently set at 88%.
Liquidation Example:
- A Trader deposits $10,000 worth of trading collateral.
- The max trading loss the Trader can tolerate is $10,000 * 88% = $8,800.
- The trading collateral is liquidated in full by the protocol to repay Lenders once trading losses exceed $8,800.
Last modified 1mo ago