1-Click Leveraged Longs

A common strategy performed by users of CDPs and lending protocols is to loop their loans to create a de facto leveraged long position one the asset they are using as collateral. In this strategy, a user would deposit their collateral into the protocol, borrow BitUSD against it, then convert that BitUSd to more of the underlying collateral which they then deposit into the protocol again and repeat the process until it becomes too economically inefficient to do repeat. This is a tedious and time consuming process that is also sub optimal and wasteful.

To improve the user experience (UX) we are working on a method for users to create an optimized leveraged long position in a single transaction. This will save time for users and improve the efficiency of their leveraged positions. Here's how it works:

1. First a user puts up some collateral asset supported by BitProtocol.

2. The user then takes out a flashloan for some amount of the same collateral (dependent upon the amount of leverage they want to use)

3. Next, the user deposits the borrowed collateral and their own collateral assets into BitProtocol and borrow BitUSD against it.

4. The BitUSD borrowed is converted back to the borrowed collateral (on a DEX or some other means)

5. Finally, the collateral asset is used to repay the flashloan

This entire process occurs in a single transaction and results in the user having an open position in BitProtocol worth notably more than the amount of assets they originally held in the wallet, but with an open loan against them that may have a margin call or be redeemed against if the their chosen collateral decreases in value. Likewise, this process can be inverted to repay the loans without any additional capital provided by the user.