I have been using Smart Alpha for over a month, as a junior on the Eth pool. And I can not make make sense of the leverage.
My positions seem to be amplified by only 4x, not the 17x. It is not adding up for me. I do not understand how exactly the leverage is being calculated.
From what I understood if Eth went up by $1, then with 17x leverage then the juniors would get $17. So I am trying to figure out how the x17 leverage calculation. fits in.
You have to do it by % not the $ amount.
Your example would be true if ETH was $1 and went up by $1 at 17X leverage.
Building on @lordtylerward’s comment.
In your example, for every 1% move up in price, your Junior position gains 17%…
If you deposited $100 worth of ETH, you’d have $117 on a +1% move.
Important to note you’re getting different leveraged exposure for each epoch you stay in. If you’ve been in for the last month, you’ve probably been getting anywhere from 12-20x leverage. In epoch 19, you would have incurred a sharp loss (as a fellow Junior, I also got slapped with -80%+ that week).
Depending on which epoch you joined, a 4x gain from your starting position would make a lot of sense!
Thank you for the clarification, this is much appreciated. I am primarily a holder/investor of bond tokens and am testing out the system, to understand how it works first hand.
Thanks Tyler, this now makes sense!