Stella
  • Overview
    • 🌠Getting Started
    • šŸ¤Pay-As-You-Earn (PAYE) Model
  • Protocol Mechanism
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    • šŸš€Stella Strategy
      • Why Stella Strategy is Unique?
      • Strategy Type
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      • Collateral Factor
      • Borrow Factor
      • Credits
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      • Liquidation
        • Liquidation Discount
        • Post-Liquidation Value
        • Pendle/Penpie Liquidation Price
      • Price Impact
      • Leverage
      • Supported Strategies
    • šŸ¦Stella Lend
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      • Pool Type
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      • Yield Vault
      • Withdrawal Delay
    • šŸ’°Yield Calculation
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      • Precautionary Measures
      • Slow Mode
  • App Guide
    • Walkthrough Stella APP
    • Open a position
    • Close a Position
    • View Your Position
    • Add/Remove Extra Collateral
    • Claim Assets from Liquidated Position
    • Deposit & Withdraw Assets
  • Developers
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      • Core
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    • šŸ“œContract ABI
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    • šŸŽÆALPHA Token
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    • 🟠About Stella
    • šŸ”ŽAudit Reports
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    • šŸ“–Terms of Use
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Leverage

PreviousPrice ImpactNextSupported Strategies

Last updated 1 year ago

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:

  1. : This factor represents the value assigned to each unit of assets used as collateral in the position.

  2. : This factor determines the value assigned to each unit of assets borrowed in the position.

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

MaxLeverage=BFBFāˆ’CF\text{MaxLeverage} = \frac{\text{BF}}{\text{BF}-\text{CF}}MaxLeverage=BFāˆ’CFBF​

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.

MaxFELeverage=11āˆ’thresholdā‹…CFBF\text{MaxFELeverage} = \frac{1}{1 - threshold\cdot\frac{\text{CF}}{\text{BF}}}MaxFELeverage=1āˆ’thresholdā‹…BFCF​1​

Normally, the threshold variable is set to 0.97-0.98.5 based on each strategy

šŸš€
Collateral Factor (CF)
Borrow Factor (BF)