Investor Side

LeverageX operates on a simple yet powerful principle where two main parties interact: traders and liquidity providers (investors). While traders utilize leverage for trading various assets, investors act as the bank, providing the necessary liquidity and earning fees in return.

As an investor, you can provide assets such as Bitcoin (BTC), Ethereum (ETH), USD Coin (USDC), and Tether (USDT). In exchange, you receive the LeverageX LP (Liquidity Provider) tokens. These tokens represent your share of the liquidity pool. The value of LP tokens increases over time as traders on the platform pay fees for opening, closing, and borrowing positions. These fees are added directly to the LP pool, enhancing the value of the LP tokens.

Here’s a breakdown of how the process works:

  1. Asset Contribution: Investors contribute BTC, ETH, USDC, or USDT to the LeverageX smart contract.

  2. Receiving LP Tokens: In return, investors receive LP tokens at the current pool price, representing their share of the pool.

  3. Yield Generation: The trading fees generated from traders’ activities are reinvested into the pool, increasing the value of the LP tokens.

This system ensures that even if no new investors join, the value of the existing LP tokens continues to rise due to the accumulated fees.

LeverageX vs. Jupiter

LeverageX’s LP tokens are comparable to Jupiter’s JLP tokens on Solana, where both serve as the counterparty to traders. When traders open leveraged positions, they borrow tokens from the pool. The yield from these activities is automatically compounded into the value of the LP tokens.

However, LeverageX distinguishes itself by offering leveraged trading not just on cryptocurrencies but also on stocks and other assets, which is not available on other platforms. The platform boasts an intuitive and user-friendly front end, simplifying the trading process. Additionally, LeverageX holds a first-mover advantage on the Base blockchain, providing a unique market position.

Once invested, there are no further actions required from investors. The fees generated from trading are automatically reinvested, increasing the LP tokens’ value. The liquidity pool acts as an index of the contained tokens, with each asset assigned a specific target weight (e.g., 30% BTC, 20% ETH, and 50% USDT). Investors can redeem their LP tokens for BTC, ETH, or stablecoins at any time at the pool price, allowing them to benefit from accumulated yields. Over time, LP tokens could also become tradable on decentralized exchanges (DEX), acquiring a market price and providing additional liquidity options.

Security and stability

In terms of security and stability, LeverageX prioritizes these aspects by ensuring that all smart contracts are thoroughly audited. The diversified nature of the liquidity pool, structured as an index, further mitigates risks and provides a stable earning environment for investors.

By understanding these components, investors can make informed decisions and maximize their earning potential through the LeverageX platform. This detailed breakdown ensures transparency and highlights the robust mechanisms in place to safeguard and grow investor assets.

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