Margin Trading
This section explains to users how they can perform margin trading related actions using ZeroLend's isolated pools.
Last updated
This section explains to users how they can perform margin trading related actions using ZeroLend's isolated pools.
Last updated
Margin trading introduces one of the core use cases of a lending market: the ability for users to leverage their position with only a portion of capital upfront.
With the help of flash loans, users can leverage their exposure into an asset as long as there is enough liquidity in a ZeroLend pool to borrow the asset.
Margin trading introduces multiple new avenues for users on ZeroLend. Users can
Create leveraged positions just like perps with low funding
Lever up on the yield of liquid staking and restaking assets, like stETH or eETH
Lever up on the fixed yield of Pendle's PTs
Lever up on memecoins and riskier asset classes.
Create delta-neutral plays to farm funding rates
Arbitrage rates differentials on stablecoins
Farm rewards, airdrops, points on leverage
ZeroLend margin trading works similarly to Contango using a flashloan.
When a trader opens a long ETH/USDC position with USDC as margin, the protocol gets the remaining USDC from a flash loan, swaps all USDC for ETH on the spot market, and lends ETH back on the money market, to borrow USDC and repay the flash loan.
