Factor Docs

FAQ - Leverage Building Block

What exactly is "Leverage in One Click"?
"Leverage in One Click" is our unique feature that simplifies the complexities of leveraging. At its core, leveraging amplifies your deposit's earning capacity. With our system, you can instantly boost your deposit's yield potential without needing a deep dive into the nitty-gritty of DeFi mechanics.
How does the "Asset Switching" feature work?
Asset switching is your agile tool in the ever-changing DeFi landscape. If you predict that your current asset might lose value, this feature empowers you to swap it for another that you believe will hold or appreciate in value. It's all about staying one step ahead of the market.
What's the advantage of "Debt Switching"?
Debt switching can be a game-changer. Imagine owing a sum in one asset and anticipating that its market value will drop. By switching your debt to that asset and its value does indeed decrease, you can clear your debt using fewer resources. It's a strategic way to make market movements work in your favor.
Why would I need "Asset Migration"?
Asset migration is your safety net in the volatile world of decentralized finance. Markets can be shaken by various events - regulatory changes, black swan events, or even contract vulnerabilities. During such events, one protocol may become less favorable due to soaring interest rates or perceived risks. Asset migration allows you to move your assets (and associated debt) to a different protocol that offers better stability, interest rates, or security.
Is leveraging risky?
Leveraging, by nature, magnifies both potential gains and potential losses. By leveraging 2:1, for instance, a 10% yield would effectively double. However, if the asset's value dips, the losses are similarly amplified. While Factor offers an easy-to-use leveraging process, it's crucial to be aware of the risks and monitor market conditions.
How does Factor ensure the best yield in "Leverage in One Click"?
Factor's underlying smart contracts continuously scan the market to identify and lock in the best yields available for your deposit, tapping into our platform's deep liquidity and a wide array of DeFi protocols. Your assets are always hard at work completely autonomously.
Can I switch back my assets after using "Asset Switching"?
Yes, Factor offers flexibility at your fingertips. If market conditions change or you achieve your desired goal, you can effortlessly switch back to your initial asset or any other of your choice.
What happens if the market value of my debt asset rises after using "Debt Switching"?
Debt switching, while powerful, requires careful consideration. If you switch your debt to an asset anticipating its value will fall, but it rises instead, the cost of your debt in terms of the original asset would increase. This is the inherent risk of financial strategies, and it underscores the importance of staying updated with market movements and trends. Factor provides the tools, but the decisions should always be informed.
How quickly can I migrate my assets using "Asset Migration"?
The core migration process, powered by our smart contracts, is rapid. However, the entire duration can vary due to factors like current network traffic, involved protocols, and the overarching blockchain state.
Are there any fees associated with these features?
Actions such as opening, migrating, and closing leverage positions incur a minimal 0.1% fee.