Comparison Examples

Meet Alice and Bob, both wanting to increase their ETH holdings from 1 ETH.

Alice uses a Traditional DeFi Leverage Platform:

• Alice deposits her 1 ETH (worth $2,000) as collateral

• She opens a 3x leveraged long position, effectively controlling 3 ETH

• If the platform's borrow rate or funding rate rises, Alice could end up paying unsustainable interest rates to maintain her position.

If ETH price suddenly drops 25% in a flash crash:

• Alice's position quickly becomes under-collateralized

• Her position is automatically liquidated

• Alice loses all her money

Bob uses MortgageFi:

• Bob takes a loan for 2 additional ETH using his 1 ETH as collateral

• He agrees to fixed monthly payments in USD stablecoins

If ETH price suddenly drops 25% in a flash crash:

• Bob's loan remains unaffected

• He continues making his regular USD payments

• Bob maintains his leveraged ETH position

The key difference: MortgageFi's fixed USD payments protect Bob from sudden liquidations due to market volatility. He can confidently hold his larger ETH position without fear of losing it to price fluctuations, as long as he maintains his regular payments. This approach allows for more stable, long-term accumulation strategies. Compared to Futures

While both MortgageFi and traditional futures platforms like GMX allow users to gain leveraged exposure to crypto assets, their approaches and outcomes differ significantly. Understanding these differences is crucial for users looking to optimize their crypto strategies.