LeverFi is a decentralized, on-chain leveraged trading platform built on Ethereum. This platform aims to solve various decentralized finance (DeFi) problems through an intuitive solution suite.
What is LeverFi?
LeverFi is a permissionless, on-chain leveraged trading platform that aims to provide a number of unique, simple features to increase asset efficiency. Asset efficiency refers to how well investors use their time and assets, and how well they implement trading strategies to maximize returns and minimize risks and costs. The more efficient you are, the more likely you are to generate higher returns with less capital and fewer resources.
As a decentralized exchange (DEX), LeverFi gives users transparency and self-retention over their own assets.
For investors
LeverFi allows investors to take larger trading positions by providing investors who hold yielding assets a way to manage (i.e. consolidate and trade) them within a single margin basket. A consolidated margin basket can also help reduce liquidation risk by diversifying risk across the entire basket.
Investors can also earn returns when trading on margin. The platform buys the underlying assets from the liquid secondary market of DEXe. LeverFi routes transactions through various trading platforms to ensure optimum pricing with minimal slippage.
For asset owners
Lenders on LeverFi can lend to investors for real returns without direction risk. Real returns on LeverFi are highly competitive and sustainable, making it an attractive option for lenders. LeverFi’s robust platform design allows lenders and investors to interact with each other securely and without permission.
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 perform platform tasks.
collateral manager
To begin trading, users must first deposit assets in the form of collateral. Margin Manager makes it easy to:
- Deposit and withdrawal of collateral
- Distributing collateral to generate returns
- Collateral verification via chainlink oracles
investment manager
Trading Manager smart contracts perform investment-related functions, including:
- Execution of buying and selling transactions
- commercial agreements
- Profit and loss (PNL) calculations
- Investment guidance
- profit withdrawal
Lending manager (Landing Manager)
To generate returns, lenders must deposit their assets in Lending Pools, where investors will borrow them for trading. Lending Manager smart contracts keep the process running smoothly through the following functions:
- Deposit and withdrawal of borrowed assets
- Recording borrowed assets
- Calculating and accruing borrowing fees using the utilization rate curve
risk manager
One of the LeverFi ecosystem’s risk management strategies is to liquidate investors at risk of bad debt. Risk Manager smart contracts perform risk-related functions, including:
- Calculation of account health
- Management of Credit-to-Value (LTV) collateral risk parameters
- Management of Liquidation Threshold risk parameters
- Payment of investor profits and losses
What is LEVER?
The LeverFi ecosystem works 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. However, it serves as the backbone of the LeverFi platform in two key ways:
- As a governance token for protocol management
- Betting to win some of the platform fees
LEVER holders can participate in the governance of the ecosystem by having a say in important decisions that affect the future of the platform. They can also stake their tokens, meaning they can be locked for a certain period of time to earn rewards from the platform’s fees. These fees are derived from user activities such as trading, borrowing and lending.
