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Trail2Crypto @Trail2Crypto on x 1405 followers
Created: 2025-07-19 09:29:00 UTC
Friend of mine asked me how the re-leveraging works. So here's the answer:
The re-leverage smart contract is designed to automatically maintain a target leverage ratio. When the protocol borrows against a collateral position (e.g., WBTC or crvUSD), this contract ensures that:
If the value of your collateral increases, it borrows more to maintain the desired leverage (e.g., 2×).
If the collateral value drops, it de-leverages, reducing borrowed exposure to avoid liquidation.
This helps protect your deposit by reacting to price changes in real time, aiming to stay safely within the boundaries of what the lending protocol (like crvUSD) allows.
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