> For the complete documentation index, see [llms.txt](https://pookafinance.gitbook.io/pookafinance-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://pookafinance.gitbook.io/pookafinance-docs/getting-started/quickstart.md).

# 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.&#x20;

***

### &#x20;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.