Demystifying Position Components on Increment: vTokens, Collateral, and PnL
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Holding any trader or liquidity provider position on Increment involves three key components: Collateral vTokens PnL (profit and loss) The vTokens held by a user are not backed in a 1:1 ratio by collateral. In fact, the value of vTokens is typically backed by a relatively small amount of collateral, calculated based on the formula that involves parameters like minimum margin, collateral weight, and market risk weight. For example, vTokens worth $100 might be backed by a collateral deposit of only $16, depending on the given parameters.
Demystifying Position Components on Increment: vTokens, Collateral, and PnL
Demystifying Position Components on…
Demystifying Position Components on Increment: vTokens, Collateral, and PnL
Holding any trader or liquidity provider position on Increment involves three key components: Collateral vTokens PnL (profit and loss) The vTokens held by a user are not backed in a 1:1 ratio by collateral. In fact, the value of vTokens is typically backed by a relatively small amount of collateral, calculated based on the formula that involves parameters like minimum margin, collateral weight, and market risk weight. For example, vTokens worth $100 might be backed by a collateral deposit of only $16, depending on the given parameters.