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Stella Strategy offers users the ability to open leverage positions across a variety of strategies. The leverage level associated with each strategy is determined by two key factors:
The factor value is carefully tailored based on the historical volatility and risk profile of each asset by Stella research team to ensure that the users and protocol are safe.
The maximum achievable leverage through the smart contract is determined by the following formula
However, the maximum leverage displayed on the Stella App is calculated using the following formula as a precautionary measure against excessive exposure to liquidation risk.
Normally, the threshold variable is set to 0.97-0.98.5 based on each strategy