# LIMORA PROTOCOL - USER FAQ

## Frequently Asked Questions for Traders & Matchers

**Last Updated:** December 11, 2025

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# 📊 FOR TRADERS

## Getting Started

### **What is Limora and what can I do with it?**

Limora is a decentralized platform where you can trade cryptocurrencies with leverage (borrow money to increase your position size) without giving up custody of your funds. You can:

- Open LONG positions (bet on price going up)
- Open SHORT positions (bet on price going down)
- Use up to 50x leverage on major cryptocurrencies
- Set automatic stop-loss and take-profit orders
- Track your profits and losses in real-time

### **Do I need to deposit my crypto somewhere?**

No! Limora is **non-custodial**, meaning you keep control of your funds in your wallet. You only send funds when you open a trade, and they return to your wallet when you close it.

### **Is there a minimum deposit?**

There's no platform minimum, but you'll need enough to cover:

- Your collateral amount (what you're putting up)
- Gas fees for blockchain transactions
- The 0.1% entrance fee

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## Trading Basics

### **What cryptocurrencies can I trade?**

You can trade **Over 300 different cryptocurrencies**, including:

- **Major coins:** BTC, ETH, SOL, ATOM, LINK, DOT, UNI
- **Altcoins:** DOGE, AVAX, MATIC, ADA, XRP, LTC, BNB
- **DeFi tokens:** CRV, OP, ARB
- **Others:** ICP, TRX, FIL, SUI, WLD, APT, BCH, ETC, SEI, FET, SHIB

Full list available in the trading interface.

### **What does leverage actually mean?**

Leverage multiplies your position size. Example:

- You deposit: **10 USDC**
- You choose: **5x leverage**
- Your actual position: **50 USDC worth** of BTC
- If BTC goes up 10%, you make 50% profit (10% × 5x) (minus fees)
- If BTC goes down 10%, you lose 50% (-10% × 5x) (minus fees)

⚠️ **Higher leverage = Higher risk of liquidation**

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## Fees & Costs

### **What fees do I pay?**

You pay two main fees:

1. **Entrance Fee: 0.1%** of your position size (paid once when opening)

- Example: $1,000 position = $1 fee

2. **Interest Rate** (variable, typically 5-20% APR)

- Only on borrowed amount (leverage - 1)
- Charged continuously while trade is open
- Example: $1,000 position, 5x leverage, 15% APR
- Borrowed: $800 (you provided $200, borrowed $800)
- Daily interest: ~$0.33
- Weekly interest: ~$2.31

3. **Gas Fees:** Blockchain transaction costs (varies by network congestion)

### **How is interest calculated?**

Interest accrues **every second** your trade is open, based on:

Interest = Borrowed Amount × APR × (Time Open / 365 days)

Example:
- Position: $1,000
- Your collateral: $200 (5x leverage)
- Borrowed: $800
- APR: 15%
- Trade open: 7 days

Interest = $800 × 0.15 × (7/365) = $2.30

The interest rate is shown **before** you place your order.

### **What are the fees?**

You'll see:

- Entrance fee (0.1%)
- Interest rate (APR %)
- Estimated gas fees

All fees are displayed in the trade review panel before you confirm.

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## Risk Management

### **What is liquidation and how do I avoid it?**

**Liquidation** happens when your losses approach your collateral amount. The platform automatically closes your position to prevent you from owing money.

**How to avoid:**

- Use **lower leverage** (2-5x instead of 50x)
- Set a **stop-loss** below liquidation price
- Monitor your positions regularly
- Don't use 100% of your available funds

**Liquidation prices:**

- **LONG position:** Price drops by (1 / (leverage + 1))
- Example: 10x leverage → liquidated if price drops ~9%
- **SHORT position:** Price rises by (1 / leverage)
- Example: 10x leverage → liquidated if price rises 10%

The liquidation price is shown in your trade details.

### **What is a stop-loss and should I use one?**

A **stop-loss** automatically closes your trade if the price moves against you, limiting your losses.

**Example:**

- You go LONG on BTC at $50,000
- Set stop-loss at $47,500 (-5%)
- If BTC drops to $47,500, trade auto-closes
- You lose 5% instead of potentially more

**✅ Recommended:** ALWAYS set a stop-loss, especially with high leverage!

### **What is take-profit?**

**Take-profit** automatically closes your trade when you hit your profit target.

**Example:**

- You go LONG on ETH at $2,000
- Set take-profit at $2,200 (+10%)
- If ETH hits $2,200, trade auto-closes
- You lock in 10% profit (× your leverage)

**Tip:** Use take-profit to secure gains while you sleep!

### **What is a limit order?**

A **limit order** only executes your trade at a specific price or better.

**Example:**

- BTC current price: $50,000
- You want to buy LONG at $48,000 (expecting a dip)
- Set limit price: $48,000
- Trade only executes if BTC drops to $48,000

Your trade stays **pending** until the limit price is hit. You can cancel anytime.

### **Can I close my trade anytime?**

Almost always, yes! But:

- ✅ **Market hours:** 24/7 trading
- ⏰ **Minimum duration:** Some trades require a minimum time open to prevent abuse
- ✅ **Manual close:** Click "Close" button in Active Trades table
- ⚠️ **Gas fees apply** when closing

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## Trade Management

### **How do I monitor my trades?**

Go to the **Trade** page:

- **Active Trades table** shows all open positions
- **Unrealized P&L** updates in real-time
- **TradingView chart** displays live prices
- Auto-refreshes every 5 seconds

### **What happens if I don't have liquidity to match my trade?**

If no matcher has available funds:

- Your trade goes to **Pending Trades**
- You'll be matched when liquidity becomes available
- You can **cancel** anytime and get your collateral back
- If using a **limit order**, trade executes when both price and liquidity conditions are met

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## Safety & Security

### **Is Limora safe? Can I lose more than I deposit?**

- ✅ **Non-custodial:** You control your private keys
- ✅ **Liquidation protection:** Trades auto-close before you owe money
- ✅ **No negative balance:** You cannot lose more than your collateral
- ⚠️ **Code risk:** Like all DeFi, there's code risk (audits planned)

### **How do I withdraw my profits?**

1. Close your trade (profits auto-return to your wallet)
2. View balance in **Balances** page
3. You can then bridge to other chains or withdraw to CEX

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# 💰 FOR MATCHERS (Liquidity Providers)

## Getting Started

### **What is a Matcher and why would I become one?**

As a Matcher, you provide liquidity (capital) that traders borrow for leverage. You earn **passive income** from:

- **Interest paid by traders** (you receive 70% of interest)
- **Potential trading profits** (if you choose unhedged strategy)

Think of it like being a **bank** that lends money to traders, earning interest on loans.

### **How much can I earn as a Matcher?**

Your earnings depend on:

- **Interest rate:** Varies by market (typically 10-20% APR)
- **Your share:** You receive **70%** of trader interest (protocol keeps 30%)
- **Utilization:** How much of your capital is actively matched
- **Capital Efficiency:** Limora's concentrated lending model (see below)

**Traditional Lending Platform Example:**

- You deposit: $10,000 USDC
- Utilization: 80% ($8,000 matched to trades)
- Average interest rate: 15% APR
- Your gross earnings: $8,000 × 15% × 70% = **$840/year**
- Your APR on total capital: **8.4% APR**

**Limora's Concentrated Lending Advantage:**

With the same $10,000 deposit but concentrated lending mechanics, you could potentially service **~9x more trading volume** with the same capital. This means:

- Effective interest on: **$72,000** in matched positions (vs. $8,000 traditional)
- Your gross earnings: $72,000 × 15% × 70% = **$7,560/year**
- Your APR on total capital: **~75.6% APR**

*See "Concentrated Lending" section below for how this works.*

### **What's the minimum to become a Matcher?**

There's no platform minimum, but consider:

- Gas fees eat into small deposits
- Recommend at least **$500-1,000** to be cost-effective
- Larger deposits = better utilization rates

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## How Matching Works

### **How does the matching process work?**

1. **You deposit** USDC (or other supported collateral) into your Match Vault
2. **Traders request** leveraged positions
3. **Backend automatically matches** your liquidity with trader requests
4. **Interest accrues** every second while matched
5. **When trade closes**, your capital + interest returns to your vault
6. **You can withdraw** unencumbered (unmatched) funds anytime

You do **zero work** after depositing—it's 100% passive!

### **Can I choose which trades to match?**

No, the platform automatically matches based on:

- Token type (USDC matches USDC trades)
- Available balance
- First-come, first-served
- Your hedging preference (hedged vs. unhedged)

This ensures fair distribution and maximizes your utilization.

### **What does "encumbered" vs. "unencumbered" mean?**

- **Encumbered:** Currently matched to active trades (locked)
- **Unencumbered:** Available to match new trades OR withdraw

**Example:**

- Total deposited: $10,000
- Encumbered: $7,000 (in 5 active trades)
- Unencumbered: $3,000 (available to withdraw or match)

You can only withdraw unencumbered amounts.

### **Concentrated Lending: Why Limora Yields Are Higher**

Limora uses a unique **"Concentrated Lending"** model that significantly amplifies lender yield compared to standard margin platforms.

**The Core Innovation:**
In traditional lending protocols, lenders must provide the **full borrowed amount** (e.g., $900 for a 10x trade). Limora Matchers only provide the **collateral portion** needed to hedge, yet earn interest on the full position.

**How It Works:**
1. **Trader:** Opens a LONG position on Limora with 8x leverage.
2. **Matcher:** Automatically counters with a SHORT position on Limora (taking the opposite side).
3. **Matcher (Hedge):** Opens a LONG position on dYdX (using their own leverage) to neutralize price risk.

**Capital Efficiency Comparison:**

Let's say a trader opens:
- Collateral: **$75 USDC**
- Leverage: **8x**
- Total Position: **$600 USDC**

| Platform Type | Capital Required from Lender | Interest Earned On | APR Multiplier |
| :--- | :--- | :--- | :--- |
| **Traditional Platform** | **$525** (full loan) | $525 | 1x |
| **Limora (Concentrated)** | **$75** (hedge collateral) | $525 | **~7x** |

**Real Example:**
- Matcher deposits: **$75 USDC**
- Trader requests: 8x leveraged BTC trade ($600 total)
- Matcher provides: **$75** (hedges with 8x on dYdX)
- Interest charged to trader: 18% APR on **$525** borrowed
- Matcher receives: 70% × $94.50 = **$66.15/year**
- **Matcher's APR: ~88% on their $75 capital**

Compare to traditional platform:
- Same scenario requires **$525** from lender
- Interest: 70% × $94.50 = **$66.15/year**
- **Traditional APR: ~12.6% on their $525 capital**

This concentrated model allows Matchers to service high trading volumes with minimal capital while earning dramatically higher yields.

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## Hedging Strategy

### **What's the difference between hedged and unhedged matching?**

**HEDGED (Risk-Neutral):**

- Protocol opens opposite position on dYdX
- You earn interest with minimal price risk
- Example: Trader goes LONG BTC → You're SHORT BTC on dYdX
- Price moves don't affect your returns much
- **Best for:** Conservative investors wanting stable yields

**UNHEDGED (Directional Risk):**

- No hedge on dYdX
- You earn interest + potential profit if trader loses
- If trader wins, you lose (minus interest earned)
- **Best for:** Risk-takers or those with market views

**Example comparison:**

- Trader: LONG BTC with $1,000, 10x leverage
- Interest: 15% APR

**Hedged Matcher:**

- Provides $900 (9x of trader's $100 collateral)
- Earns: $94.50/year in interest (10.5% APR)
- Price risk: Near zero (hedge protects)

**Unhedged Matcher:**

- Provides $900
- Earns: $94.50/year in interest
- Plus/minus: Trader's P&L (you take opposite side)
- If BTC crashes: You profit + interest
- If BTC moons: You lose (offset by interest)

### **Can I change from hedged to unhedged?**

Not for existing deposits. You'd need to:

1. Withdraw your unencumbered funds
2. Wait for active matches to close
3. Re-deposit with new hedging preference

### **What are the costs of hedging?**

Hedging has costs:

- **dYdX trading fees:** ~0.05-0.1% per trade
- **Potential slippage:** On large orders
- **Funding rates:** Daily fees on dYdX perpetuals (can be positive or negative)

These costs are **automatically deducted** from your returns. The displayed APR already accounts for them.

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## Earnings & Withdrawals

### **When do I receive interest payments?**

Interest **accrues and is collected continuously**:

- Interest accumulates in real-time (every second trades are open)
- Backend job runs every ~1-3 seconds to check for collectible interest
- Once interest exceeds minimum transaction threshold, it's immediately transferred
- Funds move: Live Trade Address → Interest Address → Your Match Vault
- Added to your unencumbered balance instantly
- You can withdraw anytime

**Note:** There's no waiting period. Interest is collected as soon as there's enough to cover transaction costs (typically within minutes of a trade opening).

### **How do I withdraw my funds?**

1. Go to **Match** page
2. Toggle to "Withdraw" mode
3. Enter amount (up to unencumbered balance)
4. Click "Withdraw"
5. Approve transaction in wallet
6. Funds return to your wallet in ~30 seconds

⚠️ **You can only withdraw unencumbered funds** (not matched to active trades).

### **What if I want to withdraw but all my funds are encumbered?**

You must wait for trades to close. Options:

1. **Wait naturally:** Trades will close when:
- Trader manually closes
- Stop-loss/take-profit triggered
- Liquidation occurs
2. **Set expiration date:** Future deposits can have expiration (no new matches after date)

Average trade duration: 1-7 days.

### **Can I earn yield on my unencumbered balance?**

Not automatically, but:

- It's available for new matches (earning potential)
- You can withdraw and deploy elsewhere
- Consider leaving ~10-20% unencumbered for quick matching

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## Risks & Safety

### **What are the risks of being a Matcher?**

**For HEDGED Matchers:**

- ✅ **Low price risk** (hedge protects)
- ⚠️ **Smart contract risk** (all DeFi has this)
- ⚠️ **Hedge execution risk** (dYdX could fail to execute)
- ⚠️ **Liquidation risk** (extreme scenarios where hedge doesn't fully cover)

**For UNHEDGED Matchers:**

- ⚠️ **Full price exposure** (you're on opposite side of trader)
- ⚠️ **Can lose principal** if markets move hard against you
- ⚠️ **Smart contract risk**

**Both:**

- ✅ **No liquidation of YOUR funds** (you're the lender, not leveraged)
- ✅ **Interest offsets losses** (you earn even if trader wins)

### **Can I lose more than I deposit?**

**No**—worst case scenarios:

- **Hedged:** Lose up to ~5-10% (hedge fails in extreme volatility)
- **Unhedged:** Lose up to 100% of matched amount (if trader 10x's their money)

You **cannot** go into negative balance.

### **What happens if a trader gets liquidated?**

1. Trader's position auto-closes
2. Your encumbered funds released
3. You receive:
- Your principal back
- Accrued interest up to liquidation
- Potential liquidation fee share (5-10% of trader's collateral)

Liquidations are **good for you**—you earn interest without trade running longer!

### **What if the protocol gets hacked?**

- Funds are in smart contracts (not protocol-controlled wallets)
- Multi-signature controls on protocol addresses
- Regular audits planned (check status on website)
- Bug bounty program encourages white-hat hackers to report issues

As with all DeFi, only deposit what you can afford to lose.

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## Advanced Questions

### **Can I see which trades my funds are matched to?**

Yes! Go to **Match Trades** page:

- See all your active matched positions
- View trade IDs, sizes, directions
- Track P&L of each match
- Monitor hedge performance (if hedged)

### **What is "full hedge" vs. "partial hedge"?**

- **Full hedge:** ≥95% of your position is hedged on dYdX
- **Partial hedge:** <95% hedged (some directional risk remains)

The Match Trades table shows hedge type for each position.

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# 🔧 TECHNICAL QUESTIONS

## Platform & Compatibility

### **Which blockchains does Limora support?**

- **Primary:** Base (Ethereum L2)
- **Hedging:** dYdX (for automated hedging)

### **What browsers are supported?**

- ✅ Chrome/Brave (recommended)
- ✅ Firefox
- ✅ Edge
- ⚠️ Safari (may have wallet connection issues)

### **Is there a mobile app?**

The platform is mobile-responsive and works on phones via your mobile browser.

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## ⚠️ DISCLAIMERS

**Trading Risk:** Leveraged trading is high-risk. You can lose your entire collateral. Only trade with funds you can afford to lose.

**Not Financial Advice:** This FAQ is educational only. Do your own research before trading or providing liquidity.

**Smart Contract Risk:** DeFi protocols carry smart contract risk. While audits are planned, bugs may exist.

**Regulatory Risk:** Cryptocurrency regulations vary by country. Ensure compliance with local laws.

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**Have more questions?**

Join our Discord: https://discord.gg/EmJ9tPsmgJ

Join our Telegram: https://t.me/limora_community

Follow us on X: https://x.com/limoraprotocol

Visit the website: https://www.limora.finance