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Traders - Deposit and Trade

1. Deposit Collateral

Traders first need to deposit collateral (reference: Supported Collateral List) in the form of single assets (such as BTC, ETH, USDT or LP tokens (such as Curve-LP, Uniswap-LP or Sushi-LP).
The underlying value of the collateral deposits (Collateral Liquidity) are calculated in USD using Chainlink oracles:
Collateral Liquidity USD = Sum(Collateral Amount * Price)

Illustration

If a user deposit $50,000 worth of Curve3Pool-LP tokens and $30,000 worth of ETH, the Collateral Liquidity for this user is $80,000.

2. Check Leverage Liquidity

Loan-to-Value (LTV) Ratio

All collateral deposited will have a LTV Ratio, which measures the collateral value risk.

Leverage Factor

The Leverage Factor is a global protocol value that limits the maximum leverage that traders can use.

Leverage Liquidity

Leverage Liquidity determines the amount of liquidity a trader can borrow from the Lending Pools and is calculated in USD:
Leverage Liquidity USD = (Collateral Liquidity USD * LTV) * Leverage Factor

Illustration

Continuing on from the above illustration, assuming that LTV is 80%, Leverage Factor is 5 and current PNL is zero, then the liquidity that the user can borrow from the Lending Pools is:
($50,000 * 80% + $30,000 * 80%) * 5 = $320,000
The user can borrow up to $320,000 worth of liquidity from the Lending Pools.

3. Enter and Exit Long Trade

Users can reference the Tradable Assets List for the list of assets supported for trading on the LeverFi platform.

Enter Long Trade

When a trade is executed, assets are borrowed from the Lending Pools and executed across multiple DEXs for optimized pricing.
The trader will end up with (a) debt payable to Lending Pool and (b) the asset purchased as his net trade outcome.

Illustration

Assume that the above user borrows and sell 135,000 USDC (go short) to buy 4.5 BTC (go long) at spot price of $30,000.
His trade portfolio becomes:
Asset
Short
Long
USDC
(135,000)
0
BTC
0
4.5
Following the trade, the user's Leverage Liquidity is now reduced to:
Leverage Liquidity Remaining = $320,000 - $135,000 = $185,000

Exit Long Trade

The trader can exit the trade and settle his outstanding debts by selling the Long positions against the Short positions.

Illustration

Assume that BTC price increased to $33,000 and the user decides to close the trade by selling the BTC for USDC. Since the user has borrowed USDC, assume that 270 USDC is charged as borrow fees.
His trade portfolio becomes:
Asset
Short
Long
USDC
0
13,230
BTC
0
0
PNL = Sum(Longs) + Sum(Shorts) = (4.5 * 33,000) + (-135,270 * 1) = +13,230 USDC
Since the user has a positive PNL, he is entitled to withdraw 13,230 USDC (trading profits) from the protocol.
If the user does not withdraw his profits, the Leverage Liquidity is increased to:
Leverage Liquidity USD = $320,000 + ($13,230 * 5) = $386,150

4. Enter and Exit Short Trade

Users can reference the Tradable Assets List for the list of assets supported for trading on the LeverFi platform.

Enter Short Trade

When a trade is executed, assets are borrowed from the Lending Pools and executed across multiple DEXs for optimized pricing.
The trader will end up with (a) debt payable to Lending Pool and (b) the asset purchased as his net trade outcome.

Illustration

Assume that the above user borrows and sell 5 BTC (go short) to buy 150,000 USDC (go long) at spot price of $30,000.
His trade portfolio becomes:
Asset
Short
Long
USDC
0
150,000
BTC
(5.0)
0
Following the trade, the user's Leverage Liquidity is now reduced to:
Available Leverage Liquidity = $320,000 - $150,000 = $170,000

Exit Short Trade

The trader can exit trades and settle his outstanding debts by selling his Long positions against his Short positions.

Illustration

Assume that BTC price changes to $25,000 and the user decides to close the trade. He therefore has to sell the USDC for BTC. Since the user has borrowed BTC, he is charged 0.006 BTC in borrow fees.
His trade portfolio becomes:
Asset
Short
Long
USDC
0
24,850
BTC
0
0
PNL = Sum(Longs) + Sum(Shorts) = (150,000 * 1) + (-5.006 * 25,000) = 24,850 USDC
Since the user has a positive PNL, he is entitled to withdraw 24,850 USDC (trading profits) from the protocol.
If the user does not withdraw his profits, the Leverage Liquidity is increased to:
Leverage Liquidity USD = $320,000 + ($24,850 * 5) = $444,250
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On this page
1. Deposit Collateral
2. Check Leverage Liquidity
3. Enter and Exit Long Trade
4. Enter and Exit Short Trade