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What is a Leveraged liquidity providing position?

Homora V2 offers a simple way to take leverage by borrowing external liquidity to add on their liquidity providing position. By taking on leverage, Homora would borrow the specified assets on behalf of the users.  

Midas uses leverage x2 for ETH Soft Long position. This means that by investing 1000 USDC in the Soft Long strategy, the user's deposit will be split in half to create an ETH-Stable pool. The same amount of ETH and Stablecoin will be borrowed by Midas via Homora V2. 

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Leveraged liquidity providing positions (>1x) will earn normal trading fee APY from corresponding DEXes and additional trading fee APY from leveraged position. However, the final leveraged APY must take into account the borrowing APY as users borrow additional fund to provide liquidity. 

Therefore, in a situation where borrowing interest of asset(s) exceeds the fees accrued to the LP position (which depend entirely on market activity and trading volume), the projected APY will be negative, meaning that the user’s position will be at loss.