1. Have you ever worried about getting liquidated overnight?
  2. Have you ever paid high gas prices to adjust the safety of your debt?
  3. Have you ever panicked and bought stablecoins to avoid a liquidation?

Flexible Leverage Index makes leverage effortless

Pulse Inc would like to propose that the Index Coop manage a series of Sets based on this new Index:

  1. Zero slippage via composable entry and exit.
  2. Unique Index algorithm reduces rebalancing needs by an order of magnitude
  3. Emergency deleveraging possible during Black Swan events for additional fund safety

We’d like to present v0.0 of the Flexible Leverage Index

Flexible Leverage Index v0.0

Objective

Calculation

Definitions:

  • Borrow Rate — the cost to borrow the asset at the DeFi Lending Protocol over the most recent epoch.
  • Epoch Length — the time between rebalances.
  • Target Leverage Ratio (TLR) — the long term target for the value of the assets held by the index divided by the value of the debt held by the index.
  • Current Leverage Ratio (CLR) — the value of the asset currently held by the index divided by the current value of the debt held by the index.
  • Maximum Leverage Ratio (MAXLR) — the highest leverage ratio the index will ever have after a rebalance.
  • Minimum Leverage Ratio (MINLR) — the lowest leverage ratio the index will ever have after a rebalance.
  • Re-centering Speed (RS) — the rate at which the Current Leverage Ratio is adjusted each period to return to the Target Leverage Ratio, when the index is not being adjusted back to the Maximum Leverage Ratio or the Minimum Leverage Ratio.

Index Price:

Calculation of the new Current Lever Ratio for the period:

Series

  • Underlying Asset: ETH
  • Target Leverage Ratio: 2
  • DeFi Lending Protocol: Compound
  • Maximum Leverage Ratio: 2.3
  • Minimum Leverage Ratio: 1.7
  • Recentering Speed: 5%

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Pulse

Pulse

Creates, maintains, and licenses financial indices for a decentralized world.