Leverage

Using leverage carries risk. If your loan defaults, your entire $SNOW collateral may be burned.

Leveraged Borrowing (Looping):

• Advanced Feature: Users can borrow $AVAX against their $SNOW, use the borrowed $AVAX to mint or buy more $SNOW, and repeat the process — known as looping.

• UI Support: A simple one-click looping interface is available directly in the Snowball dApp, allowing users to open and close positions seamlessly.

• Fee Discount: When minting $SNOW through a looped position, the minting fee is reduced from 2.5% to 1% to encourage capital-efficient looping.

• Liquidation: If a leverage position defaults, then the $SNOW collateral is burned, causing the ratio of $AVAX per $SNOW to increase. $SNOW collateral from liquidated positions are burned collectively, every day, at 00:00 UTC.

Using looping allows users to create leveraged $SNOW exposure. If a position is max looped, no additional $AVAX can be borrowed due to the diminishing AVAX returned in each loop cycle.

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One-click looping

To simplify the process, Snowball offers one-click max looped positions via the dApp. These use internal flashloans to open the entire leveraged position in a single transaction.

This makes it fast and easy for users to both enter and exit leveraged strategies with minimal manual steps.

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Flash Loans

Once $SNOW reaches its supply cap, users will need to buy $SNOW on secondary markets (e.g., Pharaoh, Blackhole) to use as collateral — it can no longer be minted.

To continue supporting looping, arbitrage, and efficient leverage, Snowball will offer flash loans natively via the dApp.

• 1% fee, no upfront collateral required

• Must be repaid within the same transaction

• Enables closing a position using the existing $SNOW collateral

• To use this feature, select "Existing Collateral" in the repayment modal

This provides a smooth and capital-efficient way to unwind positions without sourcing external $AVAX.