Leverage markets

On listed markets you can size Yes or No at 2x or 3x. USDG stays on Robinhood Chain as margin. The vault takes the other side. 1x is a normal spot buy.

#Leverage

1x buys real shares. No vault, no liquidation, no carry. 2x / 3x is synthetic. You do not hold shares. You can be long or short.

Position size

$2.50

margin you post

× 2x

$5.00

position size

P&L

on the $5.00

You risk the margin. The market moves against the size.

#Profit and loss

P&L is on size, so 2x moves twice as fast as the margin you posted. You cannot lose more than that margin. The vault is the mirror: it pays winners and keeps losers.

Who pays whom

If	Trader	Vault (LPs)
Price goes your way	Profit, capped by the $1 outcome	Pays you, junior first
Price goes against you	Loss, never more than margin	Keeps the shortfall
Hits liquidation	Position closed. Margin gone.	Takes what is left

The vault is the other side of every 2x and 3x ticket. Fees and carry accrue either way.

Fees sit on top: 1.5% of size in, 1.5% out, 1% entry spread against you. Carry is 1 bp per hour on the borrowed slice only. Round trip is about 3% of size before the price moves.

#Liquidation

A 2x long at 50¢ is not a 25¢ wipe. The close hits when loss plus carry consume 90% of net margin. On the default $2.50 / 2x example that is about 28¢. Formulas: mathematics.

Liquidation

Liq 28¢Entry 50¢$1.00

90% of margin

loss + carry to close

You lose margin

never more than you posted

Vault absorbs

no leftover for you

Closed once losses plus carry use 90% of net margin. Watch the live liq price. Carry pulls it closer.

Close all or half. Remainder must stay at least $1.
A wiped-out ticket pays no leftover carry or exit fee.
Your carry rate is fixed at open.

#Why the price is capped

A 90¢ Yes cannot really be liquidated at 2x. The vault would lock capital on a ticket that never comes back. So the engine only opens between 35¢ and 65¢.

Why the price is capped

0¢35¢65¢100¢

Too certain. No liq risk.

Can open

Too certain. No liq risk.

Near 0¢ or 100¢ a 2x ticket has no room to liquidate. Capital would sit. Opens only in the middle.

#How more liquidity raises leverage

The multiple is read from vault TVL on every open. More deposits, next rung. Less TVL, the cap steps down. A market can also sit below the pool cap.

More pool, more leverage

$1,000

$5,000

$20,000

10x

target

A deposit that crosses a rung raises the cap on the next open. A withdrawal that drops below it lowers the cap. 10x is the target. UI today stops at 3x.

Limit	Default
Min / max margin	$1 / $5
Max position size	$25
Vault capital in use	30% of TVL

Why LPs should add size: Why Hedge and Earning as an LP.

#If the price feed lags

On-chain price can only move 20% per update. No new opens while it catches up. Closes and liquidations stay on.
Older than 5 minutes is no price. Opening stops.
After 24 hours with no fresh price you can exit at zero P&L. Net margin back, no exit fee. A frozen mark would pick a winner.