Add Collateral To Position
Introduction
You can easily add collateral to your leveraged position via the position management dashboard. By adding more collateral to the position, you are ensuring that the position does not become undercollateralized and therefore reduces the position's liquidation risks.
Position Leverage Multiplier
Note that the adding of collateral only increases the position's collateral amount. Consequently, the position's leverage multiplier is reduced accordingly with the position's Health Factor also seeing a corresponding increase.
Leverage Strategy Explainers
Please refer to the Leverage Strategy Explainer if you would like to understand the leverage process and how Factor streamlines the management of leveraged positions.
Increase Your Position's Collateral
Step 1: Navigate to the target position
You can access your position via the Factor Discover overview. For easier access, you can also filter the page by the "My Vaults" quick filter to view your active positions.
Upon clicking the "Manage Position" button, you can then select the target position. Note that the following page displays all the positions created for a particular strategy.
Step 2: Select the amount of collateral to add
Once on the position management dashboard, you can then select the "Add Collateral" tab specify the additional amount of asset token to be added to the position.
Step 3: Approve additional collateral amount
To add additional collateral to the position, the strategy contract will require authorization to debit the asset token from your wallet. You will be prompted to sign an approval request if further spending allowance is required by the strategy contract.
Step 4: Confirm the collateral addition
With an additional collateral amount selected, you can execute the changes by selecting the "Add Collateral" button. This will require a signature via the connected wallet as Factor updates the position's configurations and executes the multi-step process on the underlying protocols.
Step 5: View new collateral amount
Once the collateral addition has been executed, notice that the position's key metrics have been adjusted according to the additional asset token added as collateral.
Net Value: Increases by the USD value of the additional collateral.
Collateral Value: Increases by the USD value of the additional collateral.
Health Factor: Increases as the collateral value increases relative to debt value (which is unchanged).
Liquidation Price: For this long position, the liquidation price decreases as the position's leverage decreases.
Leverage Multiplier: Viewable on the "Change Leverage" tab, the position's leverage decreases as there are more asset tokens collateralizing the same amount of debt.
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