Open Position
Last updated
Last updated
A full description will be soon
The next image shows a flowchart detailing the steps a trader takes to open a position with leverage, involving multiple transfers and actions among various entities.
Trader opens position in ETH for 1000 USDT with leverage x10.
The market exchange rate is 2000 USDT for 1 ETH.
Balance controlled by D4X main smart contract:
Balance of external Lending protocol in ETH: 0 ETH
Balance controlled by ALP:
Balance of external Lending protocol in USDT: 9000 USDT (from Lenders deposits)
Balance of Trader: 1000 USDT
Trader
Action 1: The trader orders to open a position with 10x leverage.
Transfer 1. from Trader: The trader transfers 1000 USDT to the D4X smart contract.
D4X Smart Contract
Action 2: D4X makes a leverage request to ALP.
Auto Leverage Pool (ALP)
Action 3: There's a request for receiving stored funds.
Transfer 3.1 from External Lending protocol: 9000 USDT is transferred from the External Lending Protocol to the ALP.
Transfer 3.2 to D4X smart contract: Subsequently, 9000 USDT is transferred to the D4X contract as part of the leverage process, making it a total of 10000 USDT (1000 initial + 9000 leverage).
D4X Smart Contract and DEX
Action 4: D4X starts exchange at an external Decentralized Exchange (DEX).
The exchange rate for the transaction is 2000 USDT for 1 ETH
Transfer 4.1: The total 10000 USDT (from the trader's 1000 and 9000 leverage) is transferred to the external DEXes.
Transfer 4.2: In return, 5.0 ETH is received from the external DEXes, indicating the leverage has been used to purchase ETH.
Action 5: D4X initiates sending received from DEX funds to External Lending Protocol.
Transfer 5 to External Lending protocol: The 5.0 ETH is then transferred to the lending protocol to be stored.
Balance controlled by D4X main smart contract:
Balance of external Lending protocol in ETH: 5.0 ETH (opened position)
Balance controlled by ALP:
Balance of external Lending protocol in USDT: 0 USDT
Balance of Trader: 0 USDT (all gone to position)
Result for Trader: The trader received control of position in 5.0 ETH (with the aim of potential gain with x10 leverage), sent his own 1000 USDT, and borrowed 9000 USDT.
Result for ALP: The pool lends 9000 USDT to the trader to earn interest.
The upcoming video provides a step-by-step guide on how to initiate opening position within the application.
