Leverage

• Margin in, the pool lends the rest. You put up a margin in ETHSOL, the pool's quote asset, and pick a leverage. At 10x, a margin of 1 ETHSOL borrows 9 more from the pool, in ETHSOL too. The pool lends from its own liquidity; nobody else is on the other side.
• One real trade. A long buys the Coin with the margin and the loan, in its Uniswap v4 poolits DegenHive pool. A short borrows Coins from the pool and sells them there. Opening and closing move the real price, like any trade.
• What you owe is a band. A position owes back what a narrow price band under its entry holds (over it, for a short): the loan while the price is above the band, the Coins it bought once the price is below. So its value bends down to zero at the margin-gone price and never goes under.
• Only the price now counts. A position's value depends on the price now, never on the path. A wick past the margin-gone price and back leaves it open and whole, less funding.
• Paid out in ETHSOL. A close returns the loan to the pool and pays the rest, less costs, into your Desk wallet.

• Volatility. The cap depends on the pool's volatility: 5x on the wildest pools, up to 50x on calm, deep ones. A new pool counts as Wild until it has a day of history; the DGV pool starts as Active.
• Your margin. Smaller margins get more leverage. The limit falls as your margin grows against the pool's depth, so a position never risks losing its margin to its own trade's price impact.
• The pool's room. Each side of a pool shares one budget of leverage times loan, set by its depth near the price, so high leverage runs out first. One position borrows at most a quarter of what a side lends, one Desk half. An open that does not fit can wait as an order.

Also: at least 2x, a margin worth at least about 10 USD, and at most 20 open orders and positions on a Desk. Leverage runs up to 50x; the council sets the cap per pool by its volatility. The council can pause opening on one pool or on all of them, and a Coin's creator can turn leverage off for that Coin. Neither ever stops a close. On the DGV pool, shorts open later, and a long's close that reaches the Comb's bids closes the part that filled; the rest closes once the bids move.

The pool's reserve repays what the pool loses on positions that fall past their entry. Above its cap, new money goes to the fee split, or to the Comb on the DGV pool.

A worked example

Take a 10x long with a margin worth 1,000 USD: it borrows 9,000 worth of ETHSOL. At open it pays 12.70 (1.27% of the margin) and 9.00 (0.10% of the loan). Half the pool's lending is in use, so the base rate costs 1.80 an hour. The volatility part depends on how much the price moves in a day:

A 10x perp on another exchange costs about 6 to 11 for the hour and 7.50 to 25 for 12 hours, but closes you out on a 5% to 9% fall. Here a 10% fall leaves 237 of the 1,000, and a wick past 19% and back leaves the position open. You pay more to hold, for a loss that can never be more than the margin.

• Take profit. Closes at your price, inside the trade that reaches it.
• Stop loss. Closes once the price reaches your level, within your slippage. A keeper fills it for a small tip; with Safe Mode on it pays no tip, so it may fill later.Closes once the price reaches your level, within your slippage, inside the trade that reaches it or by anyone for a small tip.
• Both. A take profit and a stop can sit on one position. Whichever fills first cancels the other.
• Entry order. Opens a position when the price comes to your level. An open the pool has no room for can wait the same way, until room frees up.
• Top up. Adds margin to an open position: it moves the margin-gone price away and resets funding's clock.
• Close. Any time, the whole position, in one transaction.

• The pot. Once leverage is live, 70% of each day's new DGV (planned) flows into the leverage pot through the day. What it does not pay carries forward.
• The draw. A losing close takes a share of the pot $R$, by the loss in the chain's own coin and a weight $w$ for the pool's depth (L.1). Ten small losses take what one large loss takes, and a loss in a thin pool counts for less.
• Held an hour. A loss counts in full once the position was open for an hour; before that, a share of it.
• Where it lands. In your Desk's DGV book. The exit tax applies if it leaves the Desk.
• Rekt today, Rekt this week. The biggest single loss of the UTC day gets 1% of the day's inflow, and of the week 2% of the week's.
• A Coin's own pot. Anyone can add DGV to a Coin's own pot. It pays that Coin's losing closes on top, by the same rule, and only ever leaves that way.

$w=\min (1,D_1/D_{\mathrm{ref}})$, with $D_1$ the money that moves the pool's price 1%, and $K$ the loss that takes 63% of the pot. The council sets both references within bounds. DGV for a loss is never counted in PnL.

• You can lose your whole margin, and quickly: at 10x a 19% fall takes it, at 50x a 4% fall.
• Funding builds by the hour. Once it reaches 90% of what a position is worth, anyone can close it.
• Your own open and close move the price. The PnL the app shows is what a close pays now, after costs.
• The most leverage, and whether an open fits, change with the pool's depth, its volatility and what is already lent.
• Meme pools are thin and can be pushed. A stop sells at the market and can fill late or low.
• DGV for a loss moves with the pot and the pool's depth, can be zero, and is not part of PnL.
• The contracts are new and have no independent audit yet. A bug can lose funds.

Use leverage only where it is lawful for you. The Terms say who may use DegenHive. Before you connect a wallet, check the link and the contract on the official list.