Margin UI Step by Step
- Connect Wallet:
Connect Network: choose Sifchain as a network:
Choose Wallet. Choose your preferred wallet to connect with. Currently, you can choose Keplr or WalletConnect Open the Margin tab:
- Open the Trade Tab Select the Pool you want to open a position in
- Choose which token to use as Collateral for the position
- Select the amount of Collateral you want to allocate to the position
- Select the amount of Leverage you want to have. High risks, high rewards: just be mindful ;)
- Review that everything is correct and open the trade:
And keep in mind that: Current Swap Rate: the swap rate in the direction of the Y to the X (i.e. 1 USDC = 16.66 ROWAN) Swap Result: Raw swap amount, which does not include the fees Fees: Swap fees (displayed as a negative number)
- Go to Trade tab
- Choose the Pool you want to trade on:
Pool Health is a way to monitor how much value is being borrowed from the pool and compare it to the value of assets of the pool. When capital is borrowed by traders from the pool, the pool assumes liabilities. When the pool has few liabilities, the health percentage will be high and close to the maximum (100%)
This is a parameter that tells you, for that pool, when your position will be liquidated. When you are “losing” on a trade, the value of your Collateral may reach the point in which it is not enough to pay back the Capital that you have borrowed. Before this happens, the protocol itself will liquidate you, to protect the lenders capital. This way, any potential gain from a liquidation is distributed to the liquidity pool. So if your Liquidation Ratio is getting close to reaching the Liquidation Threshold, it may be forced closed soon (it will at the point that it hits the liquidation ratio).
Interest Rate is the price you are paying on a per-block basis to the Liquidity Providers for the borrowed capital. Interest Rates will fluctuate based on the health of the pool. The cost you pay for Interest will affect your PnL negatively, but be beneficial for LPs (as they get rewarded with this interest for providing liquidity).
- Open the Positions tab
Date (year/month/day): the time on which you opened the position
- Pool: The Pool on which your Position has been opened. Because Rowan is the settlement token for Sifchain, it is always present as one side of a pool. That’s why in this case for the USDC <> ROWAN pool we only show USDC
Duration: The total time elapsed since your position was opened
Net Present Value is the value of your position (calculated from the spot prices for each asset). It does not represent the amount you receive if you close the position as it does not take into consideration fees or slippage.
This is the amount you pay to LPs on a per-block basis. As you are borrowing assets from the Pool, you are charged an Interest Fee to maintain your loan. Interest Rate depends on the pool health
Paid Interest is the amount you paid as Interest to the liquidity pool, and therefore the liquidity providers, for keeping your position open.
LR is a very important parameter, as it tells you how close you are to a Liquidation. When the LR reaches the Liquidation Threshold (LT), your position gets liquidated. Make sure to monitor the Liquidation Ratio of your positions as this will be an indicator of being force closed.
- Go to the Positions tab, and click “Close”
- Confirm Close: Review the Profitability of your Position (PnL), and decide whether to close your position or not. If your LR is approaching the LT, you can either close your position or add more Collateral
And keep in mind that: Closing Position: The swap result minus the fees Borrow Amount: Liabilities (displayed as a negative number) Fees: Swap fees (displayed as a negative number) Price impact: How much your trade has an impact on the assets' price Resulting Amount: The total amount received after the close (taking into account liabilities and fees) Trade PnL: The profitability of your position.
- Once you click the Close button to close a position, you can see data regarding the position
- Trade PnL shows you how profitable (or unprofitable)
A negative PnL means that the trade incurred into losses, while a positive PnL means that trade was profitable. Trade PnL takes into account fees and interest rates
As mentioned before, it is important to continuously monitor your Position's health status. The way you can do it is by looking at the Liquidation Threshold for a specific Pool, and monitoring your Liquidation Ratio. When the Liquidation Ratio approaches to the Liquidation Threshold, your Position will be liquidated and your Collateral is lost, and paid to the LPs. This protocol-enforced Liquidation is a way to avoid singular actors to gain from specific Liquidations, distributing value across the Liquidity Providers.
- To check the pool's Liquidation Threshold, open the Trade Tab
- To check the Liquidation Ratio for your position, open the Positions Tab: