LEVERAGED HOOKS · THE SIMPLE VERSION
A market that lends its own money.
Ten questions, answered like you are new here. Everything on this page is the same truth as the full design and the docs — just in smaller words. The sharp edges are simplified, not removed.
What is a leveraged hook, in one breath?
A market that is also its own lender. You put in some ETH, the market lends you more from the pool itself, and you end up holding a bigger position than your money alone could buy. No bank on the side, no second app — the pool you trade in is the pool you borrow from.
Where does the borrowed money come from?
From the market's own jar. People called liquidity providers fill the jar with ETH and tokens so everyone can trade. When you borrow, the market swaps some of that jar into tokens for you and writes down what you owe. Nothing new is printed — the jar just trades one thing it has for an IOU with your name on it.
What happens to the tokens I buy with the loan?
They stay locked inside the market as your collateral — the thing the market keeps until you pay back what you owe. You cannot walk away with the loan and the tokens at the same time. When you close the position, the market sells the tokens back, takes what it is owed, and hands you what is left.
Who are the people filling the jar, and what do they get?
The liquidity providers. They earn the market's fees — trading fees, a share of the loan interest, and exit fees. But they are not just fee collectors: they are the insurance too. If a loan goes bad and selling the collateral does not cover it, the shortfall comes out of a rainy-day reserve first, and past that, out of the jar itself. Filling the jar is underwriting, not just parking money.
What if my bet goes the wrong way?
If your locked tokens shrink in value toward what you owe, the market sells them to pay itself back. That is a liquidation, and it is the seatbelt doing its job, not the car crashing. You lose the money you put in — and with leverage that can happen faster than it would with a plain buy. Leverage can lose you everything you post, full stop.
Why does the market use an average price instead of the current one?
So nobody can flick the price for one second and set off everyone's seatbelts. Liquidations trigger on a rolling average of the last fifteen minutes, not on a single spike. The honest cost of that choice: in a real crash the average takes time to catch up, so the seatbelt is spike-proof, not fast.
What is the big line of sells I heard about — the queue?
If your big sell would itself shove other people underwater, the market settles their liquidations first, and your sell fills at whatever price is left. You wait behind the mess your own trade would cause, and you feel it as slippage. Nobody gets paid a bonus for that path — paying one would make causing a pile-up worth doing.
How much can the market lend?
Always the smallest of several limits: how much cash the jar actually holds, how much a forced sale could really sell into, and a hard cap. Smallest wins, every time. If the price looks broken, the answer is zero. A market that is thin lends little, and a market that cannot be priced lends nothing.
What is protected mode?
The market's own weather alarm. If the current price drifts too far from the average, or the market is too new to trust its own history, it stops taking new risk: no new deposits, no new positions. But every door that reduces risk stays open — you can always close, repay, add collateral, or be liquidated. Risk can leave; new risk cannot enter.
What can go wrong, honestly?
You can lose everything you put in, faster than with a plain buy. Liquidity providers can lose too, because bad loans past the reserve land on the jar. A market that prices itself can be pushed by whoever can move it — the averages and alarms make that expensive, not impossible. And these contracts are reviewed hard but unaudited. None of this is a promise of profit; there are no promises here at all.
Is this running right now?
The first contracts are live on Robinhood Chain 4663, and anyone can open a market — the Live markets list on /leverage reads the truth straight from chain. The bigger marketplace around them, where other builders publish their own modules, is still a design on the whiteboard. And markets for tokens that already trade somewhere else are drafted, not deployed.
The one-sentence version of everything above: leverage multiplies losses at exactly the rate it multiplies gains, a liquidation is the system working, and providing the money behind it is underwriting. Not financial advice.