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LeverFi is a decentralized, on-chain leverage trading platform built on Ethereum.
It aims to solve various decentralized finance (DeFi) pain points through a suite of intuitive solutions.
LeverFi offers multi-asset lending, leveraged trading solutions, and tools to improve the DeFi experience.
LeverFi hopes to provide a user-centric platform to improve asset efficiency, provide sustainable real yields, and offer leverage trading execution for all users.
At its core, LeverFi is a permissionless platform that provides transparency and self-custody for asset owners.
As the cryptocurrency space continues to grow, the need for a robust decentralized finance (DeFi) infrastructure is crucial to support the ecosystem.
Despite its improvements, DeFi still has its pain points, such as inefficient asset utilization, unstable liquidity, slippage, artificially supported yields, and poor user experience due to the complex array of protocols to navigate.
LeverFi aims to address these issues by providing users with a platform that strives to lower risks, provide sustainable real yields, and offer efficient asset management.
What Is LeverFi?
LeverFi is a permissionless, on-chain leverage trading platform that aims to offer a suite of unique, simple features to improve asset efficiency. Asset efficiency refers to how well traders deploy their time and assets, and execute trading strategies to maximize returns and minimize risks and costs. The more efficient you are, the better able you are to generate higher returns with less capital and fewer resources.
As a decentralized exchange (DEX), LeverFi empowers users to maintain transparency and self-custody over their own assets.
LeverFi offers traders holding yield-bearing assets a way to manage (i.e., consolidate and trade) them within a single collateral basket, allowing traders to take larger trading positions. The unified collateral basket can also help reduce the risk of liquidation by diversifying risk across the entire basket.
Traders can also earn yield while trading on margin. The platform buys the underlying assets on a DEXe's liquid secondary market. To ensure optimal pricing with minimal slippage, LeverFi routes transactions through various trading venues.
For asset holders
Lenders on LeverFi can lend to traders to earn real yield, with no directional risks involved. Real yields on LeverFi are highly competitive and sustainable, representing an attractive option for lenders. LeverFi’s robust platform design allows lenders and traders to securely and permissionlessly interact with each other.
How Does LeverFi Work?
There are four main components that make up the LeverFi ecosystem: Collateral Manager, Trading Manager, Lending Manager, and Risk Manager. These managers are powered by smart contracts that help execute platform tasks.
In order to start trading, users need to first deposit assets in the form of collateral. The Collateral Manager facilitates the following:
Deposits and withdrawals of collateral
Deployment of collateral for yield generation
Validation of collateral via Chainlink oracles
Trading Manager smart contracts perform trade-related functions, including the following:
Executing buy and sell trades
Profit and loss (PNL) calculations
In order to earn yield, lenders have to deposit their assets into Lending Pools, where traders will borrow them for trading. Lending Manager smart contracts ensure the process goes smoothly through the following functions:
Deposits and withdrawals of lending assets
Recording of lending assets
Calculation and accruement of borrowing fees using utilization rate curve
One of the LeverFi ecosystem’s risk management strategies is liquidating traders at risk of bad debt. Risk Manager smart contracts performs risk-related functions, including the following:
Calculation of account health
Management of Loan-To-Value (LTV) collateral risk parameters
Management of Liquidation Threshold risk parameters
Settlement of trader profits and losses
What Makes LeverFi Unique?
Yield on trading collateral
LeverFi allows traders to earn yields and leverage trades at the same time by deploying trading collateral to farming protocols. This enables traders to maximize their capital efficiency while entering leveraged trades of up to 10x. Eligible assets include BTC, ETH, Curve-LP, and Uni-LP.
Trades are executed and settled within the LeverFi ecosystem only. After depositing collateral, traders will not have direct access to the trades. Instead, they can only withdraw profits.
LeverFi is the first on-chain, cross-margin trading platform on Ethereum, enabling traders to consolidate their assets into a single collateral basket and leverage trade positions of larger sizes.
Optimized asset pricing
LeverFi sends trades through several DEXs to find the best prices for assets. This helps traders to make large trades with minimal slippage (changes in price during the execution of the trade).
Advanced trader support
For seasoned traders, LeverFi offers advanced trading strategy support — namely, pair trades, carry trades, and market-neutral trades with leverage.
Market-competitive real yields
Asset holders can earn yield on their assets with LeverFi’s lending mechanism. Lenders can gain real yield with lowered risk due to a liquidation framework that protects lender assets.
LeverFi uses open-sourced Chainlink oracles to price assets, making them more flash crash-resistant during liquidations. This feature is designed to provide more stability during volatile market conditions.
What Is LEVER?
The LeverFi ecosystem operates using LEVER, an ERC-20 token built on the Ethereum blockchain. LEVER has a total supply of 35 billion tokens but does not have any inherent value. It does, however, serve as the backbone of the LeverFi platform in two key ways:
As a governance token for protocol management
Being staked to earn a portion of platform fees
LEVER holders can participate in the governance of the ecosystem by having a say in important decisions that affect the platform's future. Additionally, they can stake their tokens, which means locking them up for a certain period to earn rewards from the platform's fees. These fees are generated by user activity such as trading, borrowing, and lending.
What's Next for LeverFi?
LeverFi plans to build a full-suite DeFi protocol to offer swapping, multi-asset lending, and leveraged trading on a single platform. To achieve this, LeverFi’s roadmap milestones will include native deployments into zk-rollups, including but not limited to zkSync, Polygon zkEVM, and more.
New features are continuously being developed to improve and enhance the user experience. One such feature allows users to participate in automated dollar-cost averaging (DCA) or range trading strategies.
This could reduce the need for high-touch management trading, which involves users having a high level of interaction and intervention during trading, like manual processing and decision-making.
LeverFi wants to expand its DeFi services to regions where crypto is growing, such as Hong Kong and China. They also aim to provide more institutional and compliant financial services.
LeverFi is a decentralized, on-chain leverage trading platform built on Ethereum. Through yield on trading collateral, unified collateral, on-chain leverage, and more, it hopes to provide a holistic platform for all its users through its features and user-friendly interface.