Borrow with Leverage

Amplify Your Trading Power

After depositing collateral, Vanna Protocol allows traders to borrow leveraged funds from the lending pool, which are deposited into their margin account as a margin balance. These funds can only be deployed within the approved list of protocols integrated into Vanna, such as:

• Perpetuals

• Options

• Spot Markets

• Yield farming on platforms like Curve, Pendle, Lido etc.

Leverage Limits Based on Collateral Type

The maximum leverage limit depends on the type of collateral. Highly liquid assets like ETH or USDC allow for higher leverage (up to 10x), while more volatile assets like altcoins or specific LSTs have stricter limits to mitigate risk.

Margin Balance & Collateral Withdrawal

The borrowed amount in Vanna includes both the collateral and the debt obtained through leverage. While traders can withdraw their principal collateral during the borrowing period, the borrowed margin from the lending pool remains locked and cannot be withdrawn or used outside the approved protocols integrated into Vanna.

Before withdrawing any principal collateral, the system assesses the health factor and PnL (profit and loss) to calculate potential losses. Any losses are deducted from the principal, and only the remaining amount can be withdrawn. The borrowed margin can only be accessed once the debt is fully repaid with interest.

Risk Management & Automated Liquidations

Vanna’s risk management systems continuously monitor the health factor of the margin account. If the borrowed margin exceeds the collateral’s capacity to support it or if the health factor falls too low, the system will trigger automated liquidations to protect the liquidity providers (LPs) from potential losses.