Earning
Leverage has to come from somewhere. If you supply it, you are paid for it — and you carry the risk that comes with it.
Supplying USDT
Every leveraged long borrows USDT. That USDT comes from suppliers, and they earn the interest borrowers pay. The rate is set by utilisation: the more of the pool is lent out, the more it costs to borrow and the more suppliers earn.
Insured or Raw
Bad debt has to land on someone. You choose whether that is you.
| Tier | You earn | On a default |
|---|---|---|
| Insured | about 70% of the yield | a reserve absorbs the loss before you do |
| Raw | the full yield | you take the write-down first |
The 30% the Insured tier gives up is what funds the reserve standing behind it. Neither tier is a guarantee: a large enough loss reaches both.
Lending the token itself
Shorts borrow the token, so a holder can lend theirs and earn interest in the token instead of leaving it idle. This is the only way shorts exist on a market — until somebody supplies, there is nothing to borrow and the market is long-only.
What a supplier actually risks
Interest is paid for taking a risk, and the risk is that a position goes bad faster than it can be closed. Liquidation is meant to happen before that, but a collapse steep enough to outrun it leaves debt with nothing behind it.
When that happens the loss is paid in order: the liquidation penalties collected on the way down, then the token’s insurance account, then the Raw tier, then the Insured tier. Every step is visible on chain — a loss is written down, not hidden in a number that stops updating.