Simple Guidance of Using Mooncake

All Mooncake features are available directly through the Mooncake App.

Whether you want 10x leveraged SPL tokens (LT), funding-yield mUSD(FT), or to earn trading fees by providing LT/FT liquidity(LP), you can do everything in one place.

Users can deposit the underlying token into Mooncake to mint either Leveraged Tokens (LT) or mUSD (FT).

When users deposit the underlying token, the protocol mints LT and mUSD in proportions determined by the target leverage of that LT market.

What is LT (Leveraged Token)?

LT is a token that automatically maintains leverage — it amplifies gains when the market goes up and amplifies losses when it goes down.

Think of LT as holding a constant 3x or 5x long position, without manually leveraging, without margin calls, and without liquidation risk.

  • If the underlying goes up 1%, a 3x LT goes up ~3%

  • If the underlying goes down 1%, a 3x LT goes down ~3%

  • No liquidations

  • You only take volatility drag

Holding one LT = holding a perpetual L-times leveraged long position.

What is FT (mUSD)?

LT is borrowing money to go long. FT (mUSD) is the token that lends money to LT.

Borrowers pay funding. Lenders receive funding.

It’s that simple.

  • FT = a token that earns the funding paid by LT holders

  • It’s USD-denominated and yield-bearing

  • The yield comes from LT’s leverage demand (not from subsidies or Ponzi mechanics)

You can think of FT as:

“Lending to traders who want leverage and collecting their funding payments.”

Stable, uncorrelated yield — independent of market direction.

What is LP?

LP splits the underlying token into LT + FT, forms the trading pair, and provides liquidity for LT traders and mUSD buyers.

In simple terms:

LP is a long-term, yield-enhanced strategy on the underlying token, earning trading fees and funding fees from market activity.

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