Beginner's Guide to gOHMRISE
Overview of how gOHMRISE works and what users can expect in different scenarios
gOHMRISE is ERC20 tokens that represents 1.7x-2.3x long exposure to gOHM. It simplify the process of opening, managing, closing leveraged long gOHM position and protect users from the liquidation. In this document we will talk about how gOHMRISE simplify the process of managing 2x long gOHM position.
Let's start with opening 2x Long gOHM position. We will compare the difference between the a normal way of opening leverage position using Rari Fuse and Uniswap V3 vs the gOHMRISE.
Suppose you are very bullish on gOHM and you want to take leveraged long position.
Assume that the current ETH price is 3500 USDC, gOHM price is 4000 USDC, gOHMRISE net-asset value is 333 USDC and gOHM LTV (Loan to Value) is 65% (for every 1 gOHM you will be able to borrow 0.65 gOHM worth of token).
User deposit 1 gOHMRISE to Rari Fuse Pool
Buy gOHMRISE with 1.14 ETH
User borrow 2600 USDC from Rari Fuse Pool
User Swap 2600 USDC to 0.65 gOHM via Uniswap V3
User deposit 0.65 gOHM to Rari Fuse
User borrow 1400 USDC
User Swap 1400 USDC to 0.35 gOHM via Uniswap V3
User deposit 0.35 gOHM to Rari Fuse Pool. Total collateral 2 gOHM Total debt 4000 USDC
As u can see, gOHMRISE simplify the multiple step process of opening leveraged position using Rari Fuse and Uniswap V3 to just one single step: "Buy".
You can learn more about how to buy gOHMRISE in here:
The biggest risk of taking 2x long gOHM position is a liquidation. If you are taking leveraged long position using lending and borrowing protocol, it requires you to make sure that collateral health ratio is above certain threshold, otherwise your collateral will get liquidated and you will lose your gOHM.
Managing your 2x long gOHM position is rather tricky and requires you to actively monitor your health ratio. Risedle solve this problem using automatic rebalancing mechanism. You don't need to worry about liquidation when you are taking the 2x long gOHM position using gOHMRISE.
You can learn more about how the gOHMRISE rebalancing process work in here:
The next step is closing 2x Long gOHM position. We will compare the difference between the normal way of closing leverage position on Rari Fuse and Uniswap V3 vs the ETHRISE way.
Assume that the current gOHM price has increased +5% to 4200 USDC, gOHMRISE net-asset value is increased +10% to 366.3 USDC. gOHMRISE value increase 2x because it represents the 2x long position of gOHM.
Here is step by step to close 2x Long gOHM via Rari Fuse and Uniswap V3 vs gOHMRISE:
User withdraw 0.5 gOHM from Rari Fuse
Sell gOHMRISE and choose the output token (ETH/USDC/gOHM)
User swap 0.5 gOHM to 2100 USDC via Uniswap V3
User repay the 2100 USDC debt to Rari Fuse, now 1900 USDC debt left.
User withdraw 0.45 gOHM from Rari Fuse Pool
User swap 0.45 gOHM to 1900 USDC via Uniswap V3
User repay the 1900 USDC debt, and now 0 debt left.
User withdraw all 1.05 gOHM from the Rari Fuse. Total collateral 1.05 gOHM with total value of 4410 USDC. User profit 410 USDC, 2x vs holding only gOHMRISE.
As u can see, gOHMRISE simplify the multistep process of closing leveraged position via Rari Fuse and Uniswap V3 to just one single step: "Sell".
You can learn more about how to sell gOHMRISE in here:
gOHMRISE is a simple way to take 2x long exposure to gOHM. User can enjoy leveraged gains by simply holding gOHMRISE and protected from liquidation.