Leverage Optimizer

Leverage Optimizer - Overview

The Leverage Optimizer tool estimates a number of relevant metrics related to pool leverage activities. Simply enter a base borrow amount and a target leverage multiple. The tool tests every eligible collateral market and shows the best achievable leverage and net APY, taking into account live caps and available liquidity.

The Leverage Optimizer page lists:

• Net APY: The combined APY from collateral token yield, supply APY, and borrow APY.

• Leverage: Current simulated leverage as per the leverage range slider.

• Max Leverage: The highest leverage multiple a user can open in a selected market, based on the initial borrow amount, LTV, collateral and borrow caps, and available pool liquidity.

• Health Rate: The pool’s collateral value (in USD) multiplied by the liquidation threshold, divided by total debt. A value above 1 means the collateral still covers every loan, 1 is the break-even point, and below 1 signals that the pool is undercollateralized.

• Liquidation Price: The collateral price at which the position is subject to liquidation.

• Total Collateral: The total simulated collateral value.

• Total Debt: The total possible debt value according to the simulation with the applied settings.

The Leverage Optimizer Tool - Settings

The Leverage Optimizer tool has a number of settings to simulate different outcomes.

• Protocols: Choose the protocols you want to include in the simulation.

• Collateral: Choose which collateral assets to include in the simulation.

• Collateral Amount: Simulate the collateral size for the leveraged position.

• Debt: Choose which debt assets can be used in the simulation.

• Debt Amount: Simulate the initial debt size for the leverage position.

• Leverage Range Slider: Simulate desired leverage multiple.

Slippage Estimates

The Slippage tool projects how deleveraging may move collateral prices, a key concern when using low-liquidity assets or when dealing with large positions relative to pool size.

Leveraged borrowers can gauge potential unwinding costs by viewing the slippage distribution curve. Simply add the desired collateral types in the Leverage Optimizer filter section. Then move the cursor across the Slippage chart to see the estimated price impact at various trade sizes.