🏦AnyCollateral
AnyCollateral: The Monad Ecosystem as Collateral
LeverUP introduces AnyCollateral, a mechanism that lets traders use supported Monad ecosystem tokens directly as margin, beyond the default options of USDC and MON.
This unlocks two things conventional perp DEX don't offer:
Capital efficiency. Your token holdings stay productive. You keep full exposure to the asset you believe in while using the same balance to open positions on other markets.
Native composability with Monad. Ecosystem tokens become directly usable as productive margin, extending their utility within the LeverUP trading layer.
How AnyCollateral Works
When you open a position using a supported ecosystem token as collateral:
The token is locked as margin for your position.
Its value is updated in real time using the oracle price.
PnL and funding fees are denominated in the collateral token.
You retain full economic exposure to the collateral token while it is locked. Its price movements affect both your collateral and your final settlement.
Settlement on Close
Payouts on position close follow a simple rule:
Default case. Settlement happens in the collateral token. If you used ABC as collateral and the position is profitable, you receive ABC. If the position is losing, the loss is deducted from your ABC collateral.
Reserve-constrained case. Winning trades are paid out from the protocol's reserves of that token. If reserves of the collateral token are insufficient to cover a winning payout in full, the shortfall is settled in LV tokens.
The USD value owed to you is fixed at the moment of position close. The LV tokens you receive are calculated by dividing this owed value by the TWAP price of LV at settlement, preserving the USD value of your payout while protecting LV pricing against short-term manipulation.
Collateral Ratios
Not every supported token contributes the same amount of margin per dollar deposited. Each token is assigned a collateral ratio (CR) that reflects its liquidity and volatility profile.
For example, a token with a 70% CR contributes $0.70 of effective margin for every $1.00 of token deposited at oracle price. More liquid, lower-volatility tokens carry a higher CR; longer-tail tokens carry a lower CR to preserve protocol solvency.
The CR for each supported token is shown in the trading interface when you select a collateral asset.
Margin and Liquidation Dynamics
Because ecosystem tokens are volatile, the USD value of your collateral changes continuously. Your position's safety depends on two independent factors:
The PnL of the perp position itself.
The USD price of the collateral token.
Either can move your position toward liquidation, even if the other is in your favor.
When the collateral token's price falls
The USD value of your collateral shrinks. Your effective leverage rises, and the position moves closer to its liquidation threshold. A large enough drop in the collateral token can trigger liquidation on its own, even when the perp position itself is profitable.
Example
You hold 1,000 ABC tokens and use them as collateral. For simplicity, this example assumes a 100% collateral ratio. In practice, supported tokens carry a CR below 100% (see above).
Setup:
ABC price: $1.00, collateral value $1,000
You open a BTC long at 10x leverage
Position size: $10,000 (notional); BTC entry $50,000
Scenario A. BTC unchanged, ABC drops sharply
BTC stays at $50,000, perp PnL = $0
ABC falls to ~$0.10, collateral value drops to ~$100, falling below the position's maintenance margin requirement
Even though BTC hasn't moved, the collateral can no longer support the position. Liquidation triggers.
Scenario B. BTC up, ABC drops harder
BTC rises 5%, unrealized profit on the BTC trade
ABC drops sharply, collateral value collapses
Even with a profitable BTC trade, the remaining collateral is too thin to support the $10,000 position. The position is still liquidated.
The takeaway: the collateral token's price is its own source of liquidation risk, independent of the underlying perp market. Monitor both.
When the collateral token's price rises
The USD value of your collateral grows. Your effective leverage decreases, and your liquidation buffer expands, even if the underlying perp market hasn't moved.
Sub-1x Force-Close
If the collateral token rallies enough that your position's effective leverage falls below 1x, meaning the USD value of your collateral exceeds the notional size of your position, LeverUP automatically closes the position.
At sub-1x leverage, the trade is no longer functioning as a leveraged position. The locked collateral exceeds what the position requires. Force-closing returns your collateral so it can be redeployed.
Example
1,000 ABC at $1, collateral $1,000
Open BTC long at 10x leverage; position size $10,000
ABC rallies to $12, collateral value $12,000
Effective leverage: $10,000 / $12,000 ≈ 0.83x
The position is force-closed and your ABC is returned to your account.
Using a volatile token as collateral introduces a second source of risk beyond the perp market itself. Monitor both the perp position and the price of your collateral asset, and top up margin proactively in volatile conditions.
Supported Tokens
LeverUP supports a curated list of Monad ecosystem tokens for AnyCollateral. Each token is reviewed for liquidity, oracle availability, and risk profile before being made available. The list expands over time as the Monad ecosystem grows.
The current list of supported collateral tokens is visible in the trading UI.
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