A Basic Walkthrough of Leverage Creation in DeFi

Correction: In the first distribution of ‘DeFi Digest 14: A Reflection on Liquidity Dynamics Through the Contagion & GHO Stablecoin’, we incorrectly referenced Voyager instead of Celsius as having a 1.2b hole in its balance sheet. The amount lent to 3AC by Voyager was $350m in USDC and 15,250 in BTC, with their current asset-liability mismatch unknown.

In last week’s DeFi Digest, the team discussed liquidity dynamics that were prevalent when Terra collapsed and Celsius unwound its ...

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