Outcome leverage
2× to 10× on a YES or NO view.
Outcome leverage lets you put up collateral, borrow the rest from the LP Vault and hold a larger YES or NO position. Your loss is designed to stop at your collateral, but a leveraged position can be liquidated long before the market resolves, even if you turn out to be right.
How a leveraged position is built
You choose a side and a multiplier: 2×, 3×, 5× or 10×. Your own money is the collateral. The LP Vault lends the difference, and the combined amount buys outcome shares through the same LMSR as any other trade.
Each leveraged position lives in its own contract, a BetProxy, so its collateral is isolated from your other positions. That isolation is what limits your loss to the collateral. That is pending testing and audit.
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Your collateral
Your own money. The designed maximum you can lose.
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Borrowed from the LP Vault
Repaid first when the position closes or the market settles.
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One isolated position
Held in its own BetProxy contract.
An illustrative 5× example
Numbers make the trade-off concrete. Here is a 5× YES position opened at 60¢, assuming the market resolves YES. It is an illustration of the mechanics, not a live rule or a quote.
Illustrative 5× YES at 60¢, market resolves YES
- Your collateral
- $200
- Borrowed from the LP Vault
- $800
- Total position
- $1,000
- 2% trading fee
- −$20
- Buys YES shares at 60¢
- 980 ÷ 0.60 ≈ 1,633.33 shares
- Payout if YES wins ($1 per share)
- ≈ $1,633.33
- Repay the loan
- −$800
- Returned to you
- ≈ $833.33
- Gain on your $200
- ≈ +$633.33 (+317%)
- Designed maximum loss if NO wins
- −$200
Before borrowing costs, exit fees and network costs, which are announced before leverage goes live. The illustrative liquidation level for this position is around 52% YES.
Payout, debt repayment and profit are three different numbers. The 1633-odd shares pay about $1,633; $800 goes back to the vault; what’s left, about $833, is your returned collateral plus a gain of about $633.
When liquidation happens
If the price moves against you far enough, the position is closed to repay the loan, and your collateral is gone. In the 5× example that happens somewhere around 52% YES, only eight points below the entry. The exact level depends on the debt, how deep the market is at that moment and the risk buffers the contracts apply.
Liquidations use a 30-minute time-weighted average price rather than a single trade, so one sharp spike is less likely to close positions. Sudden gaps can still move faster than a liquidation can execute; the LP Vault absorbs that shortfall, not you.
| Tier | Debt break-even price | Illustrative liquidation | Market must first reach | Maximum collateral |
|---|---|---|---|---|
| 2× | 30.6% | 34% | None | $1,000 |
| 3× | 40.8% | 44% | None | $666 |
| 5× | 49% | 52% | $10K market volume | $400 |
| 10× | 55.1% | 58% | $50K market volume | $200 |
Debt break-even is the price at which the position’s shares are worth exactly the loan, before exit costs. Final limits are subject to testing and audit.
Graduation: when leverage switches on
Leverage is not available on a brand-new market. A market has to show real depth and a broad set of traders first. The higher tiers need more: 5× needs about $10,000 of market volume and 10× about $50,000.
Safety limits in the design
- Position size
- $50 to $2,000
- Open positions per wallet
- At most 5
- Exposure per wallet
- At most $5,000
- Odds window
- Positions open only while the price is between 20% and 80%
- Vault borrowing cap
- Total leverage borrowing capped at 20% of the LP Vault
Technical note on the position limits
The published tier caps are labelled “maximum collateral”: $1,000 at 2×, $666 at 3×, $400 at 5× and $200 at 10×. Each of those multiplied by its leverage comes to about $2,000, which matches the $2,000 upper limit. That suggests the per-position limit measures the total position rather than the collateral, but this has not been confirmed, so treat both numbers as design parameters pending testing and audit rather than exact trading rules.
Not the same as perpetual futures
Some large venues now offer perpetual futures on crypto, stocks or commodities: leveraged bets on an asset’s price that never expire. 369X outcome leverage is different. It applies to a prediction market’s own YES or NO shares, which settle at $1 or $0 on a fixed date. The two products behave differently and shouldn’t be compared as if they were the same thing.
Risks to weigh before using leverage
You can be right and still lose everything
A leveraged position can be liquidated on a temporary price move and then watch the market resolve its way. Losing 100% of collateral is a normal outcome, not an edge case.
- Isolation limiting loss to collateral is a design intention until testing and audit confirm it.
- Borrowing and exit costs are announced before leverage goes live.
- Leverage only exists on graduated markets and within the limits above.