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1/ $ALPHA finance is yield farming on steroids. Few understand how leverage impacts your short/long exposure on ETH AHv1. You can leverage and be either. Quick explanation & examples for my fellow farmers
2/ $UNI $SUSHI LP pools require 50/50 token split. But AHv1 only allows you to borrow $ETH. This means that the leverage ratio decides only how much ETH you borrow relative to what you supply, and thus whether you're long or short ETH. A couple of examples...
3/ 1.5x leverage on 100 DAI makes you borrow $50 worth of ETH to create a 75 DAI / $75 of ETH position. To get 50/50 balance, $25 of your DAI gets swapped to ETH which makes you net long ETH 25% of your principal
4/ 2x leverage on 100 DAI makes you borrow $100 worth of ETH to create a 100 DAI / $100 of ETH position. Since your borrow matches your supplied asset, you're neither long nor short ETH. n.b. IL due to price drift will make you long/short
5/ 2.5x leverage on 100 DAI makes you borrow $150 worth of ETH for a 125 DAI / $125 ETH position. $25 of your borrowed ETH gets swapped to DAI which makes you net short ETH to the tune of 25% of your principal
6/ Basically, leveraged farming on AHv1 lets you be either long or short ETH as a function of your leverage level. Now looking forward to the many exciting possibilities with AHv2 and... gro protocol :-)
