Ledero: Leverage Defi Router

Ledero is a one-transaction leverage engine that compresses complex DeFi operations into a single atomic call. It aims to make sophisticated strategies accessible, cheaper, and safer.

Typically, opening a leveraged position requires a user to manually execute 5-10 transactions: deposit collateral -> borrow assets -> swap -> deposit again. Ledero abstracts this entire process. By utilizing flash loans, the protocol borrows the required funds upfront to instantly create the desired leverage, allowing users to multiply their exposure to an asset without needing the full upfront capital.

For a deep dive into the protocol mechanics, please refer to the Detailed Documentation.

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🚀 Opening a Position (Create Position)

The process automates calculations and swapping to maximize your capital efficiency.

sequenceDiagram
    autonumber
    actor User
    participant API as 1inch API<br/>(Off-chain)
    participant Quoter as Ledero Quoter<br/>(Chainlink)
    participant Core as Ledero Core<br/>(Beacon Proxy)
    participant FlashAd as Flashloan Adapter<br/>(Balancer)
    participant Balancer as Balancer Vault
    participant LendAd as Lending Adapter<br/>(Aave/Compound)
    participant Pool as Lending Pool
    participant SwapAd as Swap Adapter<br/>(1inch)
    participant Router1inch as 1inch Router

    Note over User, Quoter: 1. Preparation Phase
    User->>Quoter: calculateOpenParams()
    Quoter-->>User: return exact parameters
    User->>API: Get swap payload (using amounts from Quoter)
    API-->>User: return calldata

    Note over User, Router1inch: 2. Execution Phase
    User->>Core: createLeveragedPosition(params)

    Core->>FlashAd: takeFundsFirstStep()
    FlashAd-->>Core: return AdapterAction[]
    Core->>Balancer: Execute Action (Trigger Flashloan)

    Balancer->>Core: receiveFlashLoan() callback
    Note right of Core: EIP-1153 Context Unpacked

    Core->>LendAd: supplyAndBorrow()
    LendAd-->>Core: return AdapterAction[]
    Core->>Pool: Execute Actions (Supply & Borrow)

    Core->>SwapAd: swap()
    SwapAd-->>Core: return AdapterAction[]
    Core->>Router1inch: Execute Actions (Swap Debt to Collateral)

    Core->>FlashAd: repayFunds()
    FlashAd-->>Core: return AdapterAction[]
    Core->>Balancer: Execute Actions (Repay Flashloan)

    Core->>User: Transfer leftovers & Emit Event

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Example in Numbers:

1. Preparation: You have 1 WBTC ($65,000), and you want 2x leverage.
2. Flash Loan: Ledero executes a flash loan for 1 WBTC.
3. Supply: A total of 2 WBTC (your 1 WBTC + 1 WBTC from the flash loan) is supplied to Aave V3.
4. Borrow: The protocol borrows $65,000 USDC against your 2 WBTC collateral.
5. Swap: The $65,000 USDC is swapped via 1inch back into 1 WBTC.
6. Repay: The obtained 1 WBTC is returned to Balancer to repay the flash loan.

Result: In a single transaction, you hold a position of 2 WBTC (worth $130,000) with a debt of only 65,000 USDC. Your net equity remains $65,000, but your market exposure is doubled!

📉 Closing a Position (Unwind Position)

Allows you to lock in profits or save a position from liquidation. Let's assume that during the holding period, the price of WBTC increased by 50% (from $65,000 to $97,500).

sequenceDiagram
    autonumber
    actor User
    participant API as 1inch API<br/>(Off-chain)
    participant Quoter as Ledero Quoter<br/>(Chainlink)
    participant Core as Ledero Core<br/>(Beacon Proxy)
    participant FlashAd as Flashloan Adapter<br/>(Balancer)
    participant Balancer as Balancer Vault
    participant LendAd as Lending Adapter<br/>(Aave/Compound)
    participant Pool as Lending Pool
    participant SwapAd as Swap Adapter<br/>(1inch)
    participant Router1inch as 1inch Router

    Note over User, Quoter: 1. Preparation Phase
    User->>Quoter: calculateUnwindParams()
    Quoter-->>User: return exact parameters
    User->>API: Get swap payload (using amounts from Quoter)
    API-->>User: return calldata

    Note over User, Router1inch: 2. Execution Phase
    User->>Core: unwindPosition(params)

    Core->>FlashAd: takeFundsFirstStep()
    FlashAd-->>Core: return AdapterAction[]
    Core->>Balancer: Execute Action (Trigger Flashloan)

    Balancer->>Core: receiveFlashLoan() callback
    Note right of Core: EIP-1153 Context Unpacked

    Core->>LendAd: repayAndWithdraw()
    LendAd-->>Core: return AdapterAction[]
    Core->>Pool: Execute Actions (Repay Debt / Withdraw Collateral)

    Core->>SwapAd: swap()
    SwapAd-->>Core: return AdapterAction[]
    Core->>Router1inch: Execute Actions (Swap Collateral to Debt)

    Core->>FlashAd: repayFunds()
    FlashAd-->>Core: return AdapterAction[]
    Core->>Balancer: Execute Actions (Repay Flashloan)

    Core->>User: Transfer net profit

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Example in Numbers:

1. State: You have 2 WBTC (now worth $195,000) in collateral and $65,000 of debt in USDC.
2. Flash Loan: Ledero executes a $65,000 USDC flash loan.
3. Repay & Withdraw: The debt in Aave is repaid, and Ledero withdraws all 2 WBTC.
4. Swap: The protocol swaps a portion of the collateral (~0.67 WBTC) back into $65,000 USDC (since 1 WBTC is now $97,500).
5. Repay: The $65,000 USDC is returned to Balancer to repay the flash loan.
6. Profit: The user receives the remaining ~1.33 WBTC (valued at $130,000) in their wallet.

Benefit: Your net equity grew from $65,000 to $130,000. The net profit is 100% ($65,000) while the underlying asset only grew by 50%, and all unwinding actions took just 1 atomic transaction.

✨ Key Features

• Position Migration: Instantly migrate positions between protocols (e.g., from Aave V3 to Compound V3) in a single transaction to capture better APR or incentives.
• Hybrid Control (Manual Management): Ledero provides full manual control over your positions via supplyCollateral, borrowDebt, repayDebt, and claimProtocolRewards functions.
• Modular Calldata Architecture: All adapter addresses are passed directly via calldata, allowing them to be easily replaced or upgraded if necessary without core contract modification.

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🤝 Integrations with protocols

• Lending: Aave V3 and Compound V3.
• Flash Loans: Balancer V3 (0% fee).
• Swaps: 1inch Aggregator.

🏗 Architecture

• Stateless & Modular Adapters: Adapters are purely analytical. They calculate required steps and return an array of AdapterAction structs. The Ledero Core acts as the sole Action Executor, executing these commands safely.
• Transient Storage (EIP-1153): Employs TSTORE/TLOAD for secure and ultra-cheap execution context passing during flash loan callbacks without touching persistent storage.
• Vanity Addresses: To prevent accidental user errors, CREATE2 is used with strict prefix verification. Valid adapter addresses must start with 0x0000 followed by a specific hex prefix (1 — Lending, 2 — Flash, 3 — Swap).
• Upgradability: The system is built on a Beacon Proxy pattern utilizing a Namespaced Storage Layout, completely eliminating storage collisions during future upgrades.

🧪 Testing

The protocol is built with an auditor's mindset and rigorously tested:

• Mainnet Fork: Tests run against a live Ethereum Mainnet fork to interact with real liquidity.
• Unit Tests & Mocks: Core functions are isolated and tested using dedicated Mock contracts.
• Advanced Testing: Extensive use of stateless Fuzzing (via vm.assume and bound) to ensure mathematical boundaries and system stability.
• Coverage: 100% code coverage for all files in the project.

⚙️ CI/CD & Automated Pipeline

The repository includes a production-grade GitHub Actions pipeline designed with smart contract security and continuous deployment best practices in mind:

• Automated Testing & Gas Profiling: On every pull request, the CI pipeline triggers a comprehensive Mainnet fork testing suite via Foundry to validate production liquidity routes. It enforces a strict 100% code coverage standard for all core contracts and automatically generates gas snapshots, tracking efficiency regressions across protocol upgrades before any code is merged into the main branch.
• Linter & Static Analysis: Continuous integration runs strict code quality checks using solhint and built-in forge lint rules, verifying formatting consistency and code safety before any merge.
• Continuous Deployment (CD): Features a custom workflow_dispatch pipeline for manual, secure testnet upgrades. The script atomically deploys new Ledero implementation logic, securely updates the UpgradeableBeacon proxy context using GitHub repository secrets, and handles contract verification on block explorers.
• Resilient Verification Wrapper: To tackle blockchain explorer indexing latency, the deployment pipeline incorporates a resilient bash-loop wrapper around forge verify-contract --watch, automatically retrying verification processes with fixed cooling periods until the source code is successfully verified.

⚠️ Current Constraints

• Network: Ethereum Mainnet.
• Tokens: Supports standard ERC-20 tokens (requires decimals() function).

🗺 Roadmap

• Permit2 integration for seamless UX without extra approvals.
• L2 Network Expansion (Arbitrum, Optimism).
• Calldata gas optimizations.
• Custom Dispatcher & Hooks for third-party developers.
• On-chain verification of adapter hashes.