Trading

At 1× nothing is borrowed. You swap USDT for the token against a constant-product pool and the tokens land in your wallet, exactly as on any AMM. You can send them, hold them, or sell them back later. Nothing is held by the protocol.

The 0.30% fee splits three ways: 0.20% stays in the pool, 0.05% goes to the protocol treasury and 0.05% to the token’s creator, forever. The share that stays is what makes the pool deepen as it is used.

A 5× long on $200 of your own money borrows $800 of USDT from the token’s lenders and swaps the full $1,000 through the same pool. You now hold about $1,000 of the token and owe $800. That is the entire mechanism — there is no synthetic position and no second price.

A short borrows the token from holders who chose to lend it, sells it into the pool, and keeps the USDT. You profit if you can buy it back cheaper. Because the debt is denominated in the token, a rising price makes it larger — which is why a short’s risk is not symmetric with a long’s.

Closing a long sells the tokens and repays the loan; covering a short buys the token back and returns it. Both go through the pool you traded into, so a large position pays its own price impact on the way out as well as the way in.

A short is always covered by an exact token quantity rather than a dollar amount. Spending back exactly what you received buys fewer tokens than you borrowed — your own sale moved the price down and your own purchase moves it back up — so a dollar-denominated close would always leave a sliver of debt behind.

Borrowing power is not a fixed multiple. It is capped by what your collateral could actually be sold for into this pool, which means a large position on a thin market is refused even though the same position on a deep one is fine.