OLIP-5 Proposal to Close and Convert Leveraged Positions

Type: New product and technical features

Abstract: The content of this proposal will give users a new way of handling leveraged positions.

The details of the proposal are as follows: We propose a feature for Openleverage that will allow users to convert leveraged positions to spot positions by repaying assets and interest borrowed.

Statement of Need: First: From the buyer's point of view, users may not only buy coins to earn by leveraged trading. There are many ways to create income on the public chain, such as staking tokens to earn income, and participating in liquidity pool mining, put the tokens into the lending platform to earn interest, etc. Presently, after users open a position on OpenLeverage, the assets they own are locked in the opened leveraged position and can only profit by earning the difference.

If this proposal is passed, users who wish to purchase assets for various reasons can use OpenLeverage platform to easily transfer tokens from the closed leveraged positions directly to their wallets. This proposal will enable OpenLeverage to serve more application scenarios.

Example: I currently hold BUSD, but I want to buy BNB and put it into OpenLeverage’s lending pool to earn interest. To obtain BNB, I can only purchase from a DEX or centralized exchange. Once this proposal is passed, I can also obtain assets through OpenLeverage and transfer BNB to spot trading by repaying the loan.

Buying on Openleverage has the following advantages over DEXs:

1. Transactions on Openleverage have fee rewards, while PancakeSwap and other DEXs do not. I can enjoy a lower buy-in cost.

2. When my funds are not in place but I feel that the time to buy has come, I can turn on leverage to buy more tokens. Lock the purchase cost first, and then transfer these tokens to the wallet when there is more spare money.

To sum up, it can be seen that opening up leveraged positions and spot positions can allow OpenLeverage to serve more people in need and increase the application scenarios of OpenLeverage.

Second: As a seller, if I hold a leveraged position now, the current method of closing positions on Openleverage restricts users to sell tokens through DEXs. If the proposal is approved, users can convert the leveraged position into a spot position, and transfer to a market with a higher price (such as CEXs) to benefit from the higher selling price and lower handling fees to avoid the slippage found on DEXs. According to observations, Binance often has a certain price gap compared with PancakeSwap. This proposal helps users to capture more market opportunities.

Proposed by OpenLeverage Community Council member @happystar

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