Leverage is difficult to monitor in DeFi’s current state, but it may have found a friend in a new product called the Flexible Leverage Index (FLI).
The ERC-20 token, pronounced “Fly,” created by Index Coop and DeFi Pulse, using Compound and Set Protocol, aims to help token holders manage their leveraged positions.
Managing these positions currently requires a user to manually monitor the ratios of deposited collateral’s value against borrowed assets’ value. If the value of the collateral falls below a threshold against the borrowed asset, users face liquidations and fees. FLI aims to automatically recenter towards a set ratio so as to minimize the possibility of leveraged users losing their collateral.
The product will initially be available for a 2x leveraged ETH, but the launch post says that “FLIs can be created and launched for other assets on lending protocols.”