Leverage FAQ

What is the cost to create a leveraged position?

By creating a leveraged position in Alien Finance, you have to pay the trading fee to the Thruster pool of your long/short pair. The trading fee is also shown in the tx summary before execution.

What is the cost to maintain a leveraged position?

After creating the leveraged position, you have to pay borrow interest (Borrow APY) which is changing every block depending on the utilization rate. You can find the current rate in Alien Finance's market page.

Why I cannot create a leveraged position more than 3.3x sometimes?

The max ratio is different based on different long asset you choose.

Leverage ratio is calculated based on the token of the long side, because it is also the token to supply as collateral. In Alien Finance, every token has a collateral factor, which represents the % of its value that user can borrow against. For example, ETH's collateral factor is 70%. If you have $1000 ETH as collateral in Alien Finance, you can borrow $700 of any other assets.

Leverage max ratio = 1 / ( 1 - long asset collateral factor)

Therefore, ETH's 70% collateral factor leads to max ratio 3.3x, if you long ETH. And if you long USDB, you get 5.0x max ratio for USDB's 80% collateral factor.

Do I have to long and short asset at the same time?

Yes, you have to long one asset and short another asset at the same time.

If you want to just long an asset or just short an asset, please select USDB on the other side.