Levana

Introduction

During our engagement with Levana Finance, we rigorously validated the protocol’s perpetual trading mechanism to ensure its mathematical soundness and alignment with the foundational design assumptions.

Our analysis focused on key elements such as leverage limits, liquidation mechanisms, and account rebalancing fees, ensuring that each position remains well-funded under dynamic market conditions. In parallel, we refined the fee structures for traders—optimizing both borrowing and funding fees—to bolster market competitiveness. Furthermore, our work enhanced delta-neutrality incentives for liquidity providers, ensuring that their risk-reward profiles remain balanced even as market conditions evolve.

This comprehensive evaluation not only confirmed the robustness of Levana’s core formulas but also provided strategic insights to drive improvements in fee efficiency and overall platform stability.

Scope

• Validate Levana Finance’s core mathematical formulas and economic assumptions.
• Conduct extensive simulation and modeling exercises to assess the efficacy of Levana’s fee structures.
• Analyze and refine delta-neutrality incentives for liquidity providers.
• Benchmark Levana’s fee and funding models against competitors such as GMX, dYdX, and Gains Network.
• Provide strategic recommendations to optimize fee parameters and incentive structures.

Results and Findings

The validation of Levana’s perpetual trading mechanism confirmed its foundational soundness while revealing potential enhancements in fee efficiency and risk-sharing models. Our findings provide a basis for optimizing trader fees and delta-neutral incentives, which in turn support the platform’s long-term stability and market competitiveness.