Leveraging

1. Initial Deposit and Leverage

The most common approach is to deposit and leverage in a single transaction. This is ideal for users who want to create a leveraged position from scratch.

Preparing for Leverage

Before leveraging, you need to:

1. Understand your target position: Determine the collateral asset, borrow asset, and desired leverage ratio

2. Set an appropriate slippage tolerance: Typically 0.5-2% depending on asset volatility

3. Approve the necessary contracts: Your collateral token must approve the Position Management contract

Here's how to prepare the deposit and leverage transaction:

// Approve the position management contract to spend your tokens if depositing and leveraging in one transaction
const underlyingContract = new ethers.Contract(
  underlyingAsset,
  UNDERLYING_ABI,
  signer
);
const depositAmount = ethers.utils.parseUnits('1000', 18); // Adjust amount and decimals
await underlyingContract.approve(POSITION_MANAGEMENT, depositAmount);

Constructing the LeverageStruct

The key to a successful leverage operation is properly constructing the LeverageStruct:

// Create the swap data structure
// This example uses 1inch swap data, but any DEX can be used
const swapData = {
  target: '0x1111111254EEB25477B68fb85Ed929f73A960582', // 1inch router
  inputToken: COLLATERAL_ASSET_UNDERLYING,
  outputToken: BORRWED_ASSET_ADDRESS,
  inputAmount: ethers.utils.parseUnits('500', 18), // Amount to borrow and swap
  call: '0x...', // Encoded swap call data from 1inch API
};

// Construct the leverage struct
const leverageData = {
  borrowToken: E_TOKEN,
  borrowAmount: ethers.utils.parseUnits('500', 18),
  positionToken: P_TOKEN,
  swapData: swapData,
  auxData: '0x' // Optional auxiliary data for specialized protocols
};

Executing the Leverage Operation

With the LeverageStruct prepared, execute the leverage operation:

// Set slippage tolerance (1%)
const slippage = ethers.utils.parseUnits('0.01', 18);

// Execute deposit and leverage in one transaction
const tx = await positionManagement.depositAndLeverage(
  depositAmount,
  leverageData,
  slippage,
  2000000
);

const receipt = await tx.wait();
console.log(`Leveraged position created! Tx hash: ${receipt.transactionHash}`);

2. Leveraging an Existing Position

If you already have collateral deposited, you can increase your leverage without an additional deposit:

const tx = await positionManagement.leverage(
  leverageData, // Same structure as above
  slippage,
  2000000
);

const receipt = await tx.wait();
console.log(`Position further leveraged! Tx hash: ${receipt.transactionHash}`);