Opening a levered range is one instruction, not five
Mint the position, move it into the vault, borrow against it, put the proceeds back in. Two operations do it, and only one of them needs a flash loan.
A leveraged liquidity position is a stack. You mint a Uniswap range, deposit the NFT into a vault that will lend against it, borrow, and put the borrowed money back into the position. Done by hand that is four or five transactions, each one a place to stop and get distracted, and a partly-built stack is a position you did not intend to have.
Two operations build the whole thing. They differ in a way worth understanding before you pick one.
The two
- Mint, vault, borrow
- Mints the range, deposits it, and borrows onto your account. No flash loan involved. The proceeds land with you and what happens next is your decision
- Open levered
- Mints the range and opens the borrow against it inside a flash loan, with the borrowing repaid to Morpho at the end of the same callback. The leverage is built into the position as it is created
The first is a stack-builder that hands you cash. The second is a levered position from the first block. If you want the borrowed money working inside the range rather than sitting in your account, the second is the one.
What you have to name
Both take the same three decisions, and they are the strategy:
- The fee tier, in the pool’s own millionths rather than basis points. A 0.05% pool is
500. A 0.3% pool is3000. This trips up people who have read a Uniswap fee quoted in basis points everywhere else. - The lower tick and the upper tick. The range. Narrow collects more per dollar and stops collecting sooner.
- The borrow asset, which determines the vault market you end up in. A different symbol is a different market, not a setting within one.
Then what
Once it exists, the position has its own set of moves, each of which has to break the same deadlock the leverage created:
- Adding more leverage to it
- Collecting the fees it earns
- Moving its range when the price walks away
- Splitting it in two at a tick you choose
- Closing it into an Aave position instead of into cash