Leverage / Max Mining

Leverage your deposit to gain increased exposure

The Leverage strategy borrows against a collateral asset and redeposits that newly borrowed asset back to the protocol as additional collateral. Leveraging can be used to gain greater exposure to an asset.

Leverage / Max Mining

When using the Leverage strategy you select a collateral asset and then select the debt you want Leverage against. Leverage utilizes assets already in your position so you may need to supply your initial asset.

Leverage Example --

In our example we think the value of ETH will increase and would like to leverage. We started by supplying ETH to AAVE. This is our starting position:

Now we would like to leverage our ETH for more ETH. In this example we'll borrow against a stablecoin to leverage ETH. You can click the icon in debt space to change the token you will borrow against.

The Leverage function combines multiple steps in one:

  • Borrows against collateral generating debt

  • Uses the new borrowed assets and resupplies it to the position

  • This can be looped to create increased leveraged

In the input you can enter the amount of ETH to be leveraged this maximum leverage is determined by the protocol and collateral factor of the asset. For ETH you can leverage it about 4x on AAVE. This is an example of a projected leverage.

For our example we'll leverage the position about 2.5x. In the Leverage panel we'll enter the amount of the debt asset we want to use to leverage. In this case $25 USDC is borrowed against and then swapped and resupplied as ETH into our position.

Once the transaction confirms you have a position that looks like this:

Alternative Use

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