Leverage DEX Trading (StonFi & DeDust)

Remember: This guide serves as an educational tool.

By borrowing funds to invest, you can amplify your potential returns. However, this applies to both profits and losses. Remember, leverage can magnify your potential losses as well.

If the price of an asset moves against your position (goes down in a long or up in a short), the collateral you used to secure the loan might be sold off to cover your debt. This is known as liquidation.

Long Position

This involves buying an asset with the expectation that its price will increase. DeFi lending protocols allow you to borrow funds to purchase more of an asset than you initially held, magnifying potential profits.

  1. Choose the asset you want to long (e.g., TON).

  2. Deposit TON as collateral for your position.

  3. Borrow the desired amount of a stable coin like USDt - remember, leverage can amplify risk.

  4. Use the borrowed USDt to purchase more of the asset you want to long on a DEX (e.g. in this case TON).

  5. Increase leverage if need be, by supplying the purchased TON back into the protocol, borrow more USDt and repeat step 4.

  6. Monitor the price movement. When the price increases, sell TON at a higher price.

  7. Return the borrowed funds to EVAA to close your long position and pocket the profit (the difference between the buying and selling price).

Short Position

This strategy involves borrowing an asset, selling it immediately, and hoping to repurchase it later at a lower price. You then return the borrowed asset and pocket the difference as profit.

  1. Choose the asset you want to short

  2. Deposit a stablecoin (e.g. USDt) as collateral.

  3. Borrow the desired amount of the asset you want to short.

  4. Sell the borrowed asset on a DEX for USDt.

  5. Increase leverage if need be, by supplying more USDt that we obtained in step 4, borrow more choose asset and then sell it.

  6. Monitor the price movement. When the price drops, repurchase borrowed asset at the lower price using some of your stablecoin holdings.

  7. Return the borrowed asset to EVAA to close your short position and pocket the profit (the difference between the selling and buying price).

Additional Resources:

PreviousLeverage Liquid Staking (Tonstakers & Bemo)NextLeverage Farming (StonFi & DeDust)

Last updated