Risk & Reward Mechanics
While leverage increases potential returns, it also amplifies risks:
Impermanent Loss: Increased exposure to volatile LPs
Liquidation Risk: Borrowed positions may be liquidated if health ratio drops
Smart Contract Risk: Vulnerabilities in lending or farming contracts
Undercollateralized Debt
Only callable by LeverageManager with governance-approved strategies
Vault Failure
Vaults are whitelisted, modular, and have capped allocations
Oracle Manipulation
Strategies use TWAP-based NAVs and DEX pricing with circuit breakers
Liquidation Risk
Positions monitored off-chain by LiquidationBot and closed on-chain if required
Pool Volatility
Users select risk appetite (e.g., stable/stable vs ETH/altcoin pairs)
Rewards are amplified via:
LP yield (fees + emissions)
Vault autocompounding
Potential AUR emissions (governance-voted)
Optional bribes or partner rewards
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