How to unwind a Liquid Leverage position

If you use the "Close" tool on your Liquid Leverage position, you'll see that it says:

"The Close option is only available for positions with one supplied and one borrowed asset."

Seeing as these positions have both USDe and sUSDe as collateral, it means you won't be able to unwind the entire position in one transaction.

So, let's look at a couple of options for unwinding:

Show me how:

The first step would be using our "Repay" tool to take the USDe part of your collateral and clear part of the debt.

To do this, open your Liquid Leverage position:

From there, you want to use the "Repay" tool and select USDe as the asset you want to withdraw and swap to repay part of the debt.

For example, if we use the max amount of USDe on Repay (which you can do by clicking "max" under Repay), we'll be able to clear nearly the entire amount of debt in our position:

From there, you have two options:

  • You can also use "Repay" again to swap your sUSDe collateral into the debt asset to clear the remaining debt, and then withdraw the remaining balance of sUSDe

On the other hand, you can also:

  1. Use the "Withdraw" tool to take a part of your sUSDe collateral out of the position

  2. Unstake the sUSDe with a 7-day wait

  3. Swap the USDe you receive to the debt asset

  4. Use the "Pay Back" tool to repay your debt

Considering that you've repaid a large part of your debt with the first "Repay" transaction with USDe, you should be able to withdraw a large amount of sUSDe in order to unstake and repay your debt with it.

It's generally recommended to use USDe to repay a majority of your debt. The reason being is that stablecoin liquidity pools involving USDe have deeper liquidity than pairs involving sUSDe. This means that slippage and trade size impact will be higher with sUSDe swaps, and therefor it's less cost-efficient to use sUSDe to clear a larger portion of your debt.

There are two main costs with opening and closing a liquid leverage position. When the position is being opened, DeFi Saver's recipe is staking USDe for sUSDe, which provides a non-optimal rate compared to swapping it directly on the market - this impacts the position's net balance as, when repaying using the sUSDe part of the position, it's being swapped for the market price, while it's being acquired at the staking rate.

If, instead of using the "Repay" tool to swap sUSDe and clear part of the debt - you decide to withdraw and unstake your sUSDe, you'll have a 7-day period during which you're paying borrow APY with a lower amount of sUSDe earning supply APY.

To learn more about the unwinding options for your liquid leverage position, please visit our Knowledge Base article.

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