How to manually deleverage the vault to withdraw any size deposit.
Any user can issue a deleverage to the vault this creates more asset to be withdrawn, makes the position safer and allows protocols and users to redeem their full deposit.
Making iTokens more Redeemable
For iTokens to be utilized as collateral and to be integrated into other protocols all iTokens must be able to be redeemed. We do not expect everyday users to use the Deleverage and Withdraw function but anyone can use this. There are some risks when using the deleverage function if it us utilized under the wrong market conditions the caller of the deleverage can incur losses.
Deleverage and Withdraw can cause losses to your deposit if executed during negative market conditions. Please see below.
Forcing a Deleverage and Withdraw
If you issue a deleverage the vault will utilize a flashborrow to payback and unwind your desired amount. If you unwind the vault there will be increased gas costs as you would be paying the tx fee to deleverage the vault. You can issue a withdraw and deleverage by checking the box in the Withdraw panel.
The Deleverage option is in the Withdrawal menu
Deleverging during a Market Downturn
If the vault is deleveraged during a depeg or another event which would cause the vault to lose value as a result of the deleverage being executed, the caller of the deleverage will pay for the losses incurred in the deleverage.
Deleverage and Withdraw allows users who do not wish to exit to maintain their earnings while enabling protocols and large holders that need iToken redemption to be able to do so at any time.