Leverage User Guides


This section is meant to guide you along your DeFi leverage journey from helping you ask the right questions to how to open a leveraged position on the Factor dapp.

Leverage Strategy Explainer

Please refer to the Leverage Strategy Explainer if you would like to intuitively understand how Factor combines multiple DeFi primitives into a single transaction to enable streamlined management of leveraged positions.

Choosing The Right Strategy

The decision flow below guides you through the key considerations when determining whether a leverage strategy is suitable for your specific goals and expectations.

Key Considerations

  • Expected Token Price Direction: If you believe the token price will go up, open a Leveraged Long position to amplify gains from the price increases. Alternatively, if you believe the token price will go down, open a Short Leveraged position to profit from market downturns.

  • Borrowing Costs: When supplying and borrowing tokens from lending protocols, take note of the borrowing costs. If Supply APY is greater than Borrow APY, you get even more yields for lending out your token. Alternatively, if Borrow APY is greater than Supply APY, there is a borrowing cost attached to the loan and this has to be compared to the expected leveraged strategy returns.

  • Lending Overhead: Leveraged positions requires monitoring as they are susceptible to liquidation if the position becomes undercollateralized. Factor dapp displays your position's Health Factor which enables easy management of your leverage position. While liquidation risks are low as long as a reasonable leverage multiplier is selected, we understand that this introduces another consideration and would recommend depositor's to explore pure lending strategies (on our partner dapps) if they would still like to generate yield without liquidation risks.

Strategy Performance & Simulations

The interactive sheets below are meant help you gain an intuition of the potential strategy returns. Choose your tokens, add your strategy parameters, and see how Factor leverage strategies simplifies your DeFi journey.


The user guides below provides a step-by-step walkthrough of how to create and manage a leveraged position on the Factor dApp.

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