Defituna leverage, positions and exits

Defituna connects spot trading, liquidity provision and lending on Solana, with borrowing available to enlarge trading and liquidity positions. A leveraged position combines your margin, meaning your own committed capital, with borrowed tokens. Its outcome depends on price movements, debt costs and execution when you close. Liquidity providers (LPs) also face a price-range decision, while lenders supply the assets borrowers use. Price triggers can initiate an exit, although execution conditions determine when that exit completes.

Spot orders, liquidity positions and lending deposits

The activity you choose determines what your funds do: exchange tokens, supply trading liquidity or finance borrowing.

Trading tokens

The spot market supports maker limit orders and taker orders for immediate trading. Leveraged spot positions add borrowing to directional exposure. A limit order expresses a price condition; submitting it does not establish a completed trade. A leveraged position remains open until an exit executes, whether manually, through a price trigger or through liquidation.

Providing liquidity

Liquidity providers deposit assets into pools that facilitate trades. Concentrated liquidity assigns those assets to a chosen price range. Borrowing can enlarge the position, increasing the capital exposed to its trading activity and price changes. The protocol also supports liquidity provision without leverage.

Supplying lending assets

A lending deposit supplies tokens borrowers use for leverage. Its return comes from lending activity rather than managing a trading range. The deposit has its own balance and withdrawal conditions. These functions connect through shared funding and liquidity, but each creates a different financial position.

Borrowed tokens connect position exposure to repayment

When a position borrows tokens, its repayment obligation follows those tokens, so their changing value affects the remaining equity.

At opening, position size combines margin and borrowed funds. Leverage describes the relationship between that total exposure and your own capital. A position must repay debt in the token it borrowed. Consequently, a favorable change in the assets held can coincide with a more expensive debt obligation. The borrow ratio describes the composition of the borrowing, making it part of the position's exposure.

Lending utilization measures how much supplied capital borrowers currently use. Borrowing interest responds to utilization through the lending rate model. An opening rate therefore does not establish the total cost of holding a position until a later exit.

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Price ranges and debt composition shape liquidity positions

A liquidity position's selected range governs where it supplies active liquidity, while its borrowing determines the liabilities alongside those assets.

Inside and outside the range

Trading within the selected range can generate liquidity fees. Outside that range, the position stops earning those trading fees until price returns. Leaving the range does not itself close the position or settle its debt. Interest remains relevant while borrowing stays outstanding, even when the position no longer generates trading income.

Exposure on both sides of the pool

The deposited asset mix changes with price within a concentrated liquidity position. Meanwhile, the borrow ratio determines which tokens the position owes. The changing asset mix can leave the liquidity worth less than holding the deposited tokens, a difference known as impermanent loss. Borrowing adds debt exposure to that liquidity position. The liquidation calculation considers the liquidity range, token debts, remaining token balances and market threshold. A range boundary and a liquidation price therefore describe different conditions.

Costs accumulate across the holding period

Total position cost reflects the borrowing actually used, the time it remains outstanding and the operations the position executes. LP protocol charges vary by pool and action. Opening also involves a refundable deposit, which returns when the position closes. Treat that deposit separately from consumed fees when comparing the initial wallet debit with the eventual return. Trigger execution, compounding and liquidation can introduce their own charges; an opening quote cannot fix every future expense.

Repayment and compounding change an open position differently

Adding funds to repay debt reduces borrowing, while increasing position size at unchanged leverage adds exposure alongside capital.

LP management also separates claiming earned fees from compounding them into the position. The dashboard shows current margin, initial margin, funding costs and pending yield as distinct values. Comparing those fields helps distinguish additional deposits from trading performance. A larger position alone does not establish a profit.

Compounding with reduced leverage adds earned fees as margin without increasing the borrowed amount. Keeping leverage instead combines those earnings with additional borrowing. The latter preserves the intended leverage relationship while enlarging the position. Auto-compounding can apply the selected approach, subject to its execution conditions. Neither method establishes a fixed future return, because subsequent prices, trading activity and borrowing costs continue to affect the position.

Does a price trigger guarantee a completed exit?

A price trigger initiates a closing action when its condition occurs; it does not guarantee timely execution or a particular realized price.

An LP lower trigger activates when price reaches or falls below its set level; an upper trigger activates when price reaches or rises above its set level. Their settings can also specify which supported token should receive the closing proceeds. These orders close the position rather than merely move its liquidity range. Once closure completes, the associated trigger orders cancel. Network congestion can require repeated execution attempts, and rapid price movement can reach liquidation before the intended trigger executes.

Leveraged spot positions support take-profit and stop-loss settings, with manual closing also available before those triggers execute. The closing transaction, resulting position state and wallet receipt establish what happened. A chart crossing the selected price establishes only that the market reached the condition.

Liquidation and unavailable lending withdrawals

A leveraged position becomes eligible for liquidation when its loan-to-value ratio reaches the applicable liquidation threshold. Execution repays debt and returns any remainder after charges; difficult execution can lead to partial liquidation attempts. Separately, lenders face a liquidity constraint: Full utilization of a lending pool can temporarily prevent withdrawals. Withdrawal availability resumes as usable liquidity returns, rather than after a universal waiting period.

Reconcile the returned assets before committing again

A completed exit leaves a transaction history, a final position state and token movements to compare against the original commitment.

For liquidity positions, the displayed profit and loss combines collateral performance and yield, then deducts borrowing and protocol fees. Its denomination matters: performance measured against holding one token can differ from performance measured in another currency. Keep the starting deposit, subsequent additions, fee claims and final receipt distinct when reviewing the outcome. Otherwise, a capital addition can look like earnings or an earlier withdrawal can disappear from the comparison.

The next commitment starts with the assets actually available after settlement. Decide whether they will fund another spot position, support a liquidity range or remain in lending. That choice creates a new exposure and a new exit condition; the previous position's leverage and realized return do not carry forward automatically.

Defituna - common questions