# 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.

<div data-with-frame="true"><figure><img src="/files/iVL65MIm4TIBMCYCfWH8" alt=""><figcaption></figcaption></figure></div>

#### 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.

#### 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.

#### 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.

#### 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

#### 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.

#### Use Cases

* **Amplify exposure** to tokens you’re bullish on.
* **Hedge positions** by shorting volatile assets.

#### 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.


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