search
Ctrlk

5. Leverage

One-Click Leverage is Surf’s simplified leverage product that lets users open 1.01× – 3.33× leveraged long or short positions efficiently on Cardano native tokens directly through the lending protocol, eliminating the need for manual borrow looping.

hashtag
How It Works

One-Click Leverage automates the borrow looping process normally done by advanced users:

  • Long: Supply a token (e.g., SURF, SNEK) as collateral, borrow ADA, and automatically swap it back for more of the same token, which is then added to the collateral of the borrow position. → This increases your exposure to the token’s price movement.

  • Short: Supply ADA as collateral, borrow a token, and automatically sell it for ADA, which is then added to the collateral of the borrow position. → This allows you to profit if the token’s price falls. → This is also a way to Long ADA, when the token you're borrowing is one of the stable coins (e.g., USDM, USDA, DJED) or other assets such as BTC, iETH , etc.

  • Token Swap: The borrowed amount is automatically swapped for more of the collateral token using a DEX aggregator, ensuring optimal routing and minimal slippage. Surf only estimates the resulting additional tokens, Health Factor, and Liquidation Price, based on current market data.

  • Repayment: Works exactly the same way as for normal borrows on Surf. Once the principal + interest + closing fee are repaid, you regain the collateral locked in your leveraged position.

hashtag
Why It’s Different

Unlike typical leveraged trading products:

  • Surf’s leverage positions are on-chain and non-custodial.

  • There’s no order book or counterparty — leverage is powered entirely by Surf’s lending pools.

  • Positions have no fixed maturity, giving users flexibility to hold or close anytime.

hashtag
Which Assets Can You Long or Short?

  • Long: Any Cardano Native Token (CNT) that has an ADA/CNT market on Surf, depending on available supply in that market.

  • Short: Any CNT/ADA market available on Surf can be used for shorting, depending on available supply.

hashtag
Parameters

  • Leverage range: 1.01× – 3.33× (varies by market)

  • Opening fee: 1% of the borrowed amount

  • Dex Aggregator fee: a mostly refundable 10 ADA fee which is used to ensure the dex aggregator swap goes through smoothly. This fee is refunded at the end of the leveraged borrow loop.

  • Interest rate: Fixed at the time of the borrow, based on pool utilization

  • Liquidation threshold (LTV): ~40%-85% (adjusted per pool)

  • Liquidation fee: 15% applied on liquidation

hashtag
Liquidations

Positions are automatically liquidated when the Health Factor falls below 1.0. Health Factor is determined by the ratio between collateral value and borrowed value, adjusted by the pool’s liquidation threshold.

hashtag
Use Cases

  • Amplify exposure to tokens you’re bullish on.

  • Hedge positions by shorting volatile assets.

hashtag
Risks

Leverage amplifies both gains and losses. If your collateral value drops close to your borrow value, your position may be liquidated. Always monitor your Health Factor and borrow responsibly.

Last updated