Trade
Venus Trade lets you express a view that one asset will outperform another, without needing to predict absolute price direction. This guide walks through the full lifecycle of a Trade position — from opening to closing — and explains all available management actions along the way.
What Is a Trade Position?
A Trade position is made up of two legs that are managed as a single unit:
Long Leg — an asset you believe will outperform, supplied into Venus to earn lending yield
Short Leg — an asset you believe will underperform, borrowed from Venus
When you open a position, the protocol borrows the short asset, swaps it into the long asset, and supplies it — all in a single transaction. When you close, the process reverses automatically.
All profits and losses are settled in your chosen stablecoin (DSA — Default Settlement Asset), which is either USDT or USDC.
Step 1: Choose a Trading Pair
Browse the available trading pairs. Each pair shows:
The current relative price between the long and short asset
Available liquidity on both the long (supply) and short (borrow) side
Supply APY, and borrow APY
Pick the pair that matches your market view. For example, if you believe WBNB will outperform ETH, select the WBNB/ETH pair (WBNB = long, ETH = short). You can also go purely long or short on a single asset by pairing it with a stablecoin.
The long asset must have a Collateral Factor (CF) > 0 in the Venus Core Pool. The short asset must be available for borrowing in the Venus Core Pool.
Step 2: Initialize Your Position
This step activates a new position account for the selected pair and opens your first trade in one atomic transaction.
What to configure:
DSA
Choose USDT or USDC as your collateral and settlement currency. This cannot be changed later without fully exiting.
Collateral Amount
The amount of DSA to deposit. This is your initial principal.
Leverage
Your exposure multiplier. Higher leverage amplifies both gains and losses. The maximum depends on the collateral factors of the chosen assets.
Short Amount
The amount of the short asset to borrow. Cannot exceed the maximum allowed by your available capital and leverage.
Slippage Tolerance
Minimum long asset amount you expect from the swap. The transaction reverts if the swap output is below this.
Select your desired leverage multiplier and set the short amount to borrow. The UI displays the maximum leverage available based on the collateral factors of the selected assets.
Before submitting:
Review the estimated Assets amount changes, Health Factor, entry price (short/long ratio), liquidation price, and Net APY
Approve the DSA token spend on the RelativePositionManager
What happens on-chain:
A dedicated PositionAccount is deployed for this trading pair (first time only)
Your DSA collateral is supplied into Venus on behalf of the PositionAccount
The short asset is borrowed via a flash loan
The short asset is swapped into the long asset
The long asset is supplied to Venus as leveraged collateral
Any dust from the swap is returned to your wallet
Leverage and DSA cannot be changed while a position is open. To adjust either, you must fully close all positions, withdraw all collateral, and deactivate (Exit Market), then re-initialize.
Step 3: Monitor Your Position
Once open, track your position from the dashboard:
PnL %
Relative price performance since entry, amplified by leverage
PnL (USD)
Absolute profit or loss converted to USD
Long Supply
Current supplied balance of the long asset
Short Borrow
Current outstanding borrow of the short asset
Health Factor
How close to liquidation your position is. HF > 1 is safe; HF < 1 triggers liquidation
Entry Price (EP)
The short/long ratio at the time of opening
Liquidation Price
The short/long ratio at which liquidation would occur
Net APY
DSA APY + Supply APY − Borrow APY
Available Capital
Deposited collateral minus capital currently locked by open positions
** Collateral**
Collateral allocated as DSA for this position
Each position has its own independent Health Factor. If you hold multiple positions, monitor each one individually. The liquidation price may fluctuate as the prices of both legs and the DSA change; always monitor your Health Factor closely to avoid unexpected liquidation.
Step 4: Manage Your Position
While a position is active, four management actions are available.
Increase Position (Scale)
Adds to your existing position using available collateral or additional DSA principal. The same leverage ratio applies.
Use this when you want to increase your relative exposure without changing your DSA, leverage, or position account.
How it works:
Based on the current available DSA collateral, the system borrows more of the short asset and swaps it into additional long collateral.
Your leverage ratio stays the same, capital utilization will increase
Supply Collateral
Deposits additional DSA into your PositionAccount without opening a new trade. This increases your Available Capital and improves your Health Factor without changing your position size.
Use this when your Health Factor is declining and you want to reduce liquidation risk without unwinding any exposure. The deposited DSA earns supply APY immediately and increases the buffer between your current borrow value and the liquidation threshold.
Reduce Position
Closes a percentage of your position (from 1% to 100%) and settles PnL.
You can also use a small partial reduce (e.g. 5–20%) as a Health Factor management tool: closing part of the position repays a proportional slice of the short debt, which directly raises your Health Factor without requiring a full exit.
With profit: The excess long collateral (above what's needed to repay the debt fraction) is swapped back to DSA and added to your principal balance
With loss: The long collateral is swapped to repay as much of the debt fraction as possible, and remaining debt is covered by redeeming DSA collateral
After reducing, your collateral remains in the PositionAccount. You can open new trades or withdraw at any time.
A position remains visible even after a full reduce. This lets you re-enter the same market without deploying a new PositionAccount. To fully exit, use Close Market.
Withdraw Collateral
Removes Available Capital from your PositionAccount back to your wallet.
Only the portion of collateral not locked by an open position can be withdrawn. The withdrawable amount decreases as your position size increases and increases as you reduce or add collateral.
Withdrawing collateral reduces your Health Factor. Always ensure it remains above 1.0 after any withdrawal to avoid liquidation.
Step 5: Close and Deactivate
Close Market fully exits the trading pair in one transaction:
Closes all remaining open positions and settles PnL (same as a 100% reduce)
Exits the DSA market and withdraws all collateral to your wallet
Deactivates the PositionAccount
After deactivation, you can re-initialize at any time — with a different DSA, different leverage, or different collateral amount.
Understanding PnL
Trade PnL is based on the relative price movement between your two assets, amplified by leverage.
Formula
Where:
$R_0$ = Entry price ratio (short asset / long asset at open)
$R_t$ = Current price ratio
Example
You open a WBNB/ETH position:
Entry ratio ($R_0$): 0.50 ETH per BNB
Leverage: 2x
Short Amount: 5 ETH, Long Amount: 10 BNB
If BNB outperforms (ratio moves to 0.55): PnL% = (0.55 / 0.50 − 1) × 2 = +20%
If ETH outperforms (ratio drops to 0.45): PnL% = (0.45 / 0.50 − 1) × 2 = −20%
Understanding Risks
Liquidation Risk
Trade uses the same liquidation mechanism as Venus Core. If your Health Factor falls below 1, a third-party liquidator can repay part of your borrow and seize a portion of your collateral.
To manage liquidation risk:
Monitor your Health Factor regularly and track the current ratio vs. your liquidation price
Supply more DSA principal (via Supply Collateral) to improve your Health Factor without changing position size
Partially reduce your position (e.g. 5–20%) to repay a slice of short debt, which raises the Health Factor directly
Understand that leverage amplifies both gains and losses — a 2x leveraged position has twice the liquidation sensitivity
Slippage
Opening and closing positions involve on-chain swaps, which are subject to slippage. Set a realistic slippage tolerance before confirming. In extreme market conditions, a transaction may revert if the swap cannot meet the minimum output; you only lose gas in that case.
Market Risk
Relative performance positions can still lose money. If the asset you are shorting outperforms the asset you are longing, your PnL will be negative. Leverage amplifies both gains and losses symmetrically.
Interest Rate Risk
You pay borrow interest on the short leg continuously. If the borrow rate rises significantly, your Net APY can turn negative, increasing the effective cost of holding the position.
Smart Contract Risk
Trade is built on top of Venus's audited lending and borrowing infrastructure. No changes were made to core contracts, risk parameters, or liquidation engines. The new RelativePositionManager and PositionAccount contracts have been independently audited. Audit reports are available in the Security & Audits section.
Frequently Asked Questions
Can I change my DSA after opening a position? No. Your DSA is locked while the position is active. To change it, fully close all positions, withdraw all collateral, and deactivate (Exit Market), then re-initialize with a different DSA.
Can I change my leverage after opening? No. Leverage is fixed for the lifecycle of each activation cycle. Close, deactivate, and re-activate with the new leverage setting.
What happens if my position gets liquidated? Liquidation works the same as Venus Core. A liquidator repays part of your borrow and seizes a portion of your collateral at a discount. After liquidation, your position remains open but with a reduced size. You can continue managing it normally.
Is my collateral shared across different positions? No. Each trading pair has its own isolated PositionAccount. A liquidation on one pair does not affect your positions on other pairs.
What does "Available Capital" mean? Available Capital = your total deposited collateral minus the amount currently locked by your open position. This is how much you can either use to open additional exposure or withdraw from the account.
Can I have multiple positions on the same pair? Each pair has one PositionAccount per wallet. Within that account, you can increase or decrease your position size, but it is managed as a single position.
What fees do I pay? You pay standard Venus Protocol borrowing interest on the short leg. On-chain swaps during open and close incur normal DEX trading fees and slippage. Currently, there are no additional platform fees specific to Trade.
What is the difference between "Reduce Position" and "Close Market"?
Reduce Position closes your long/short trade and settles PnL, but leaves your collateral in the PositionAccount. You can re-enter the same market immediately.
Close Market does everything at once — closes all positions, settles PnL, withdraws all collateral to your wallet, and deactivates the account.
Glossary
DSA
Default Settlement Asset — the stablecoin (USDT or USDC) used as collateral and for PnL settlement
Long Leg
The asset you believe will outperform, supplied into Venus
Short Leg
The asset you believe will underperform, borrowed from Venus
Leverage
Multiplier applied to your position size relative to your collateral; fixed at activation
Health Factor (HF)
Position safety metric; liquidation occurs when HF < 1
Entry Price
The short/long ratio at the time of opening
Liquidation Price
The short/long ratio at which liquidation is triggered
Capital Utilization
How much of your deposited collateral is locked by open positions
Available Capital
Deposited collateral minus capital utilization; available to trade or withdraw
Net APY
Supply APY on the long asset plus DSA APY minus borrow APY on the short asset
PositionAccount
A dedicated on-chain smart contract per wallet per trading pair; auto-deployed on first trade
Increase Position
Add to your existing position using available capital at the same leverage
Reduce Position
Partially or fully reduce the long/short size; PnL is settled into DSA collateral
Close Market
Fully close all positions, settle PnL, withdraw all collateral, and deactivate the PositionAccount
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