Leverage

When utilizing our protocol, users can sell the borrowed USDS on the market for LSD, which can then be used to top up the collateral of their Trove.

By repeating this process, users can borrow and sell more USDS, allowing them to increase their leverage ratio to their desired level.

Assuming a perfect price stability where 1 USDS = $1, the maximum leverage ratio that can be achieved is 11x, as calculated by the following formula:

Maximum leverage ratio = $\frac{MCR}{(MCR - 100\%)}$ where MCR is the Minimum Collateral Ratio.