Introduction

Pooka Finance enables leveraged cryptocurrency trading across multiple blockchain networks. Users can deposit USDC from Ethereum (Sepolia) and trade BTC/USD and ETH/USD perpetual futures on Avalanche (Fuji) with up to 3x leverage.

Key Terms & Concepts

What are “Margin” and “Collateral”?

  • Collateral is the asset you deposit (e.g., USDC, ETH) to back your leveraged position.

  • Margin is the portion of collateral required to open and maintain your position:

    • Initial Margin: The amount needed to open a position.

    • Maintenance Margin: The minimum amount needed to keep a position open.

Liquidation occurs when:

positionSize - losses < maintenance margin

In that case, your position may be automatically closed.

Long vs. Short

  • Long: You expect the asset price to go up. You profit if it rises.

  • Short: You expect the asset price to go down. You profit if it falls

What is “Leverage”?

Leverage allows you to amplify your exposure:

Leverage = Position Size / Collateral

Example: If you use 3× leverage and deposit $100, you can control $300 worth of exposure.

Profits and Losses are both multiplied by the leverage factor.

Liquidations & LPs

When a position is liquidated:

  • A penalty is deducted.

  • The shortfall goes into the insurance fund or is auctioned to insurers/liquidity providers (LPs).

This helps maintain market stability and protect liquidity providers from unexpected loss.

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