📈Acting as a Leverage Trader

Interested in depositing rETH as margin collateral and participating as a Leverage Trader? Here’s everything you need to know.

Flat Money’s Perpetual Futures Market provides a simple way to execute large leverage positions on staked Ether (rETH) in an isolated environment to limit your exposure to other crypto assets and smart contract risk.

How to Open a Long Position

To open a long position, you need to go to the Leverage page in the Flat Money user interface (UI) and connect your crypto wallet. Head to the Open a Position section, where you will see a screen that allows you to select the amount of rETH you want to deposit as margin collateral into the Flat Money protocol.

Once you have entered the amount of rETH you want to deposit, you can choose your preferred leverage amount (i.e., 2x, 5x, 10x, 15x, or 25x). After selecting your preferred leverage amount, you can review the position preview screen below, which displays:

  • Estimated Entry Price. The entry price of your rETH long position, which accounts for a price difference of +/- 0.25% to account for price movements when you submit the transaction onchain.

  • Estimated Liquidation Price. If rETH drops below this price, your margin will be liquidated and your position will be closed.

  • Keeper Fee. The keeper fee is dependent on Base’s gas prices, which you can review on L2scan.

  • Trading Fee. When you open, close, or adjust your position, you pay a 0.08% trading fee based on your position or, if it’s an adjustment, 0.08% of the position size change.

  • Deposit. The total amount of margin collateral you’re depositing to open your long position.

  • Total. The total amount of your rETH deposit, the keeper fee, and the trading fee.

When you’ve reviewed your position and are ready to confirm the transaction onchain, you can select the Open Position button and submit the transaction onchain. Once your transaction is confirmed, your margin collateral and fees will flow into the Flat Money protocol’s shared liquidity pool. The rETH you’re borrowing for your long position also comes from this shared liquidity pool, which consists of rETH deposited by UNIT LPs, margin collateral, and various fees.

Adding to Additional Collateral to Your Margin

If your position is at risk of liquidation, you can increase the amount of margin collateral, which will require you to deposit additional rETH to further collateralize your position. As a reminder: if you adjust your position, you will need to pay a 0.08% trading fee based on the size of your position change.

How to Close a Long Position

You can also close your position and remove your margin collateral, which will be withdrawn to your wallet. As a reminder: if you close your position, you will need to pay a 0.08% trading fee.

How Liquidations Work

If your active long position reaches your liquidation price, a keeper will be able to liquidate your position. When a position is liquidated, the following happens:

  • Your margin collateral will be liquidated and will remain in the Flat Money shared liquidity pool

  • Your long position will be closed

  • Your portfolio page will be updated in the UI to reflect your Profit and Loss (PnL)

The Liquidation Process

Liquidation keepers can check the Flat Money database to fetch information about open positions and their liquidation prices. Every 15 minutes, keepers can refresh liquidation prices and get information about new positions via an RPC batch request.

When positions become eligible for liquidation, the information for those positions is sent to the liquidation queue. Keepers monitor the queue and begin to liquidate margin collateral and close positions if the canLiquidate function provides a true result.

For more technical detail on the liquidation process, see the relevant page in the Developer Resources section.

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