docs: add leverage lp module specs

[cosmic-vagabond]

Description

What has Changed?

Leverage LP module specifications

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[amityadav0]

I was wondering if we can add the equations/mechanism for leverage open, close. for example: similar to how in amm x*y = k should be maintained. Is it possible here ?

[cosmic-vagabond]

I was wondering if we can add the equations/mechanism for leverage open, close. for example: similar to how in amm x*y = k should be maintained. Is it possible here ?

@amityadav0 Good call out. The LeverageLP module operates in conjunction with two other modules: StableStake and AMM.

• In this system, some participants will bond their USDC tokens to the StableStake module, while others will use LeverageLP to borrow those bonded tokens to enhance their liquidity position in the AMM pool. This results in a debt that is recorded within the StableStake module.
• Therefore, the AMM module is utilized by participants opening a Leverage LP position to join a pool with the leveraged amount of USDC (borrowed from StableStake).

The crucial equation that helps maintain balance is:

$\text{Pool Health} = \frac{\text{Total Shares} - \text{Leveraged LP Amount}}{\text{Total Shares}}$

We ensure that Pool Health does not fall below the Safety Factor threshold, which is set at 10%.

As more leveraged liquidity is added to the pool, the Pool Health decreases, putting the underlying liquidity pool at risk of having the leveraged position liquidated.

Another important concept is the liquidation mechanism. If the position health falls below the safety factor (10%), the leverage LP position is liquidated.

$\text{Position Health} = \frac{\text{Position Value}}{\text{Borrowed Amount} + \text{Interest Staked} + \text{Interest Paid}}$

Let me update the documentation in order to include those concepts.

[cosmic-vagabond]

I was wondering if we can add the equations/mechanism for leverage open, close. for example: similar to how in amm x*y = k should be maintained. Is it possible here ?

@amityadav0 you can find the new section mechanism here bc851ac

[amityadav0]

thanks!

[jelysn]

Leveragelp and Masterchef docs are coming in #544 and I recommend to close this PR or update the base to post_v32_fix to avoid conflict. These changes are applied in post_v32_fix branch already.

[cosmic-vagabond]

duplicated #544