📈Trading

How Trading Works

By opening a position, the trader borrows liquidity from the pool which decreases available pool reserves pro rata.

After opening the position, the protocol swaps through reduced reserve pool, converting the borrowed Y tokens into additional X tokens, thereby increasing the trader's desired leverage.

The trader then sends the initial margin in X tokens to the pool to overcollateralize the position, with the majority of the leverage provided by the pool's liquidity providers viathe borrowed reserves.