Terms Related to Ethereum Leverage Index
- Borrow Rate: The borrow rate is the cost of the ETH asset and borrowing it under the DeFi Lending Protocol over the latest epoch.
- Epoch Length: Epoch Length is the time between rebalancing which is the cost to borrow the asset under the DeFi Lending Protocol
- Target Leverage Ratio (TLR): Target Leverage Ratio is the long-term target for the ratio between the value of assets held by the index and the value of the debt it holds.
- Current Leverage Ratio (CLR): The Current Leverage Ratio is calculated by dividing the index’s current asset value by the index’s current debt value.
- Maximum Leverage Ratio (MAXLR): MAXLR is the ETH2x-FLI’s highest leverage ratio. The index will be the highest after a rebalance.
- Re-centering Speed (RS): In order to return to the Target Leverage Ratio, the Re-centering Speed is the rate at which the Current Leverage Ratio is adjusted each period. It occurs when the index is not adjusted back to either the Maximum Leverage Ratio or the Minimum Leverage Ratio.
What is the Ethereum Flexible Leverage Index?
Ethereum Flexible Leverage Index makes leverage effortless and enables market participants to take on leverage while minimizing the transaction costs and associated risks while maintaining the collateralized debt.
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