Introducing: Ape Mode — Unleash the degen within
The SpiritSwap team has had the honor and privilege to collaborate with Abracadabra in the development of our next product suite to market: Ape Mode.
With the product expected to launch in January, we wanted to drop this article as a teaser for what to expect.
Ape Mode is a leverage trading feature, unique to SpiritSwap and a first of its kind on Fantom’s DeFi ecosystem.
What is Ape Mode?
Ape Mode will provide our users with a simplified, one-click leverage trade opportunity, offering up to 3x leverage to begin with. To start with we will be allowing long positions for the following assets (with more assets being added further down the track):
How does Ape Mode work?
The leverage function is facilitated when a user deposits FTM (as an example) as collateral. That FTM is then used to take out a loan (MIM) on Abracadabra. This MIM is then used to purchase more FTM. This additional FTM you have purchased is considered the “leverage” you open the “long” position with.
With any borrowing mechanic, there is always a risk. The risk with using Ape Mode is the dreaded L-word: “liquidation”. Your liquidation price will be indicated on the far right-hand side of the “Your Position” tab. It is important to keep a close eye on this price, as this will determine the security of your collateral. If the price of FTM drops below the liquidation price, your position will be closed and collateral lost in the liquidation process, so please use at your own discretion.
The liquidation price is calculated by MIM borrowed x FTM collateral x 0.75 (collateral ratio).
Using Ape Mode is pretty straightforward, but let’s see how it’s done.
1. Navigate to our new “Ape Mode” tab.
2. Select the asset you want to leverage just like you would when swapping a token on our DEX (for this example we will use $FTM).
3. In the top entry field of Ape Mode “Pay”, you should input how much FTM you would like to enter into a “long” position (this is your collateral).
4. You can then adjust the leverage from 1.1x to 3x leverage. This will determine how much additional FTM you will be utilizing as “leverage”. For this example, we will go with 2x leverage.
5. Once the collateral is added and leverage is adjusted, the “Long” tab will then indicate how much FTM you will end up with as your “Leveraged position size”. E.g. selecting 10 FTM at 2x leverage would see your position open with 20 FTM.
6. Before we open this position, it's important to make note of the other guides offered when opening a position. At the bottom of the trade tab, there are five main indicators:
- Leverage position size: displays your positions leverage, in this case 2x.
- FTM liquidation price: this is the most important guide to take note of. IF the price of FTM falls below this number, your position will be flagged for liquidation and subsequently liquidated by the liquidator bots. This means you lose the 10 FTM you put up as collateral when entering the trade.
- MIM left to borrow: indicates how much MIM is available in the Kashi market pool in order to facilitate leverage trading. If this pool runs dry (just like it can on abracadabra) then leverage trading won’t be available until pools are replenished. We are working with Yearn Finance vaults to get MIM deposited into our kashi markets as one of their strategies. The Yearn vault link is this.
*Remember, these pools can be replenished at any time by any community member by clicking on the “deposit into MIM vault”. This lends MIM to the Kashi market place, offering lenders a passive return from fees generated by people using Ape Mode.
- Price: Represents the cost of the token at the time you enter the position.
- Slippage tolerance: represents the amount of slippage you are allowing for when entering the position.
7. Click “Ape”.
8. Once the position is open, your collateral ratio and position information will then be available to view under the “Your positions” tab of Ape Mode.
*Note 1. The disparity between your leveraged output “long” and your “Position size” (in this example 20 FTM became 19.8905 FTM). This is the fee that lenders of the Kashi pool scalp when lending you MIM to open the long position.
**Note 2. As the funds borrowed to facilitate the leveraged position are in an “Isolated debt market” the borrow APY is SUBJECT TO CHANGE. Please monitor your position closely to assess profitability. If the isolated market runs dry of funds, the borrow APY is subject to increase exponentially thus reducing profitability of the leverage order. Every person who uses Ape Mode is expected to read this document and understand the products functionality / risk of this happening. You are responsible for managing your investments, no one else. If you are uncertain of anything, please ask for more information in our discord server before using this product.
9. Once your position has matured to a profit level you are satisfied with, you can close the position and take profits by clicking the “Close” button under the “Your Position” tab.
In closing, we would like to take the time to thank Daniele Sestagalli, 0xMerlin and Yearn Finance team for working alongside the SpiritSwap team to make this feature possible for our users to enjoy. We will be adding additional features to this product in the near future which will include the addition of other assets available to leverage and offer short positions. We look forward to continuing our partnership with the Abracadabra team so we can continue to deliver greatness for our users.