Last updated: February 2026 Version 1.0
Introduction
This document describes how borrowing works when you use Multiply, Dimes' prediction markets leveraged trading product, through any participating front-end platform. Please read these terms carefully before opening a leveraged position.
By submitting an order, you acknowledge that you understand and accept these terms.
What You're Doing When You Borrow
2.1 How Multiply Works
When you open a leveraged position through Multilpy:
You post collateral (stablecoins) to support your position
Dimes extends credit to you, allowing you to control a larger notional exposure than your collateral alone would permit
You hold a synthetic position — you do not directly own prediction market shares
Dimes executes and maintains hedges on external venues (Kalshi, Polymarket) to support your position
You bear all directional profit and loss on your position
Dimes retains full control of the position throughout its lifecycle
2.2 You Own the Exposure
You are the beneficial owner of the directional market exposure. If the market moves in your favor, you profit. If it moves against you, you lose. Dimes does not share in your gains or absorb your losses — you bear the full economic outcome of your position.
2.3 Dimes Controls the Position
While you own the economic exposure, Dimes retains operational control of the position at all times. This means Dimes can:
Adjust your effective leverage based on market conditions
Reduce your position size as the market approaches resolution
Liquidate your position if margin thresholds are breached
Close your position if the market becomes ineligible for leverage
This control exists to protect the integrity of the credit facility and ensure orderly risk management. It is not discretionary — all actions are governed by predefined rules described in this document.
Eligible Markets
3.1 What Markets You Can Trade
Multiply supports leveraged exposure on:
Binary markets: Markets with two outcomes (YES / NO)
Simple categorical markets: Markets with a small number of discrete outcomes, where each outcome meets liquidity requirements
Markets must trade on a supported venue (currently Kalshi and Polymarket) and satisfy ongoing eligibility thresholds for depth, spread, and price stability.
3.2 What Markets Are Excluded
You cannot open leveraged positions on:
Markets that can resolve at any time without a tradable price path (e.g., "Will X happen before Y?")
Markets with unpredictable resolution timing
Markets with too many outcomes (liquidity becomes too fragmented)
Markets with insufficient liquidity (depth, spread, or volume below thresholds)
Markets approaching their hazard window (see Section 7)
Markets currently in close-only state due to degraded conditions
The front-end will display which markets are available for leverage. If a market is not shown or leverage is disabled, it does not meet eligibility requirements.
3.3 Eligibility Can Change
Market eligibility is evaluated continuously. A market that was eligible when you opened your position may become ineligible due to:
Liquidity deterioration (depth drops, spread widens)
Approaching resolution or hazard window
Venue issues (data staleness, execution problems)
Anomalous market behavior
If a market becomes ineligible while you have an open position, the market enters close-only state. You can close your position, but you cannot add to it. In some cases, Dimes may reduce your position automatically (see Section 7).
Collateral
4.1 What You Post
You post USD-denominated stablecoins as collateral when opening a position. The specific stablecoins accepted may vary by front-end.
4.2 Where Your Collateral Sits
Your collateral is held in protocol-controlled accounts. It is:
Segregated from Dimes' corporate funds
Segregated from other users' collateral
Never commingled with facility capital
Dimes has operational control over your collateral for the sole purpose of enforcing margin requirements and executing liquidations.
4.3 What Your Collateral Does
Your collateral serves three purposes:
Absorbs your profit and loss: If your position moves against you, losses are deducted from your collateral. If it moves in your favor, gains accrue to your collateral.
Covers execution costs: When your position is closed (by you or by liquidation), any slippage, venue fees, and transaction costs are deducted from your collateral.
Protects the credit facility: Your collateral ensures that Dimes can unwind your position without loss to the facility, even under adverse execution conditions.
4.4 Collateral Is Not a Deposit
Your collateral is not a bank deposit. It is not insured by any government or private insurance program. It is capital at risk. You can lose some or all of your collateral if your position moves against you or if execution costs on liquidation exceed your remaining margin.
Leverage
5.1 Available Leverage
Multiply offers leverage from 2x to 10x, depending on market conditions. The maximum leverage available for a given market is determined dynamically based on:
Current market liquidity (depth and spread)
Time remaining until resolution or hazard window
Current concentration of positions in that market
Overall system utilization
5.2 Leverage Is Not Fixed
The maximum leverage displayed when you open a position reflects current conditions. Maximum leverage can decrease at any time due to:
Liquidity deterioration
Approaching resolution
Increased system-wide exposure to the market
If maximum leverage decreases after you open a position, your existing position is not automatically reduced — but you cannot add exposure that would exceed the new maximum.
5.3 How Leverage Affects Your Position
Higher leverage means:
Greater exposure relative to your collateral
Higher potential profit if the market moves in your favor
Higher potential loss if the market moves against you
Closer liquidation price — less room for the market to move against you before liquidation
Example:
You post $1,000 collateral at 5x leverage
Your notional exposure is $5,000
If the market moves 10% against you, you lose $500 (50% of your collateral)
At 10x leverage, a 10% adverse move would lose $1,000 (100% of your collateral)
5.4 Choosing Your Leverage
You select your desired leverage when opening a position. The front-end will display:
Maximum available leverage for the market
Your implied liquidation price at different leverage levels
Estimated fees at different leverage levels
You are responsible for selecting a leverage level appropriate to your risk tolerance.
Margin and Liquidation
6.1 No Margin Calls
Multiply does not issue margin calls. There is no opportunity to add collateral to an open position to avoid liquidation. If your position breaches maintenance margin, it is liquidated automatically.
6.2 Margin Components
Your position has three margin thresholds:
Initial margin: The collateral required to open the position. You cannot open a position without posting full initial margin.
Maintenance margin: The minimum collateral required to keep the position open. If your collateral falls to this level, liquidation is triggered.
Liquidation buffer: An additional cushion above maintenance margin that absorbs execution slippage during unwind. This buffer is sized to cover expected execution costs under adverse conditions.
6.3 Liquidation Trigger
Liquidation is triggered when your remaining collateral can no longer support a bounded unwind under conservative execution assumptions. In practice, this means liquidation fires before your collateral is fully exhausted — ensuring that execution costs can be covered.
6.4 What Happens at Liquidation
When liquidation is triggered:
Dimes closes your position immediately
All execution costs (slippage, venue fees, transaction costs) are deducted from your collateral
A liquidation fee of 10% is assessed on any remaining equity
Dimes is made whole first
Any residual collateral after costs and fees is returned to you
If execution costs exceed your remaining collateral, you receive nothing. You will never owe Dimes money beyond your posted collateral — your maximum loss is 100% of your collateral.
6.5 Liquidation Price
Your liquidation price is displayed in the front-end and updated continuously. It reflects:
Your entry price
Your leverage
Modeled unwind costs (slippage, fees)
Liquidation buffer
Accrued fees owed to Dimes
The liquidation price is an estimate. Actual liquidation may occur at a slightly different price depending on real-time market conditions at the moment of execution.
6.6 Liquidation Is Automatic and Final
Liquidation is executed automatically by Dimes' systems. There is no manual review, no grace period, and no appeal. Once triggered, liquidation cannot be reversed.
6.7 Liquidation Fee
A liquidation fee of 10% of remaining equity is charged at liquidation. This fee:
Offsets execution and operational costs of forced unwind
Discourages behavior that repeatedly triggers liquidation
Is retained by Dimes and not shared with originating front-ends
If you close your position voluntarily before liquidation, no liquidation fee is charged.
Leverage Decay and Hazard Windows
7.1 What Is a Hazard Window?
As prediction markets approach resolution, liquidity often deteriorates — especially on the losing side. The hazard window is the period where a market can gap or resolve abruptly without crossing intermediate prices (e.g., when an election is called, an announcement is made, or an event concludes).
During the hazard window, orderly exit may not be possible. Dimes does not hold leveraged exposure through hazard windows.
7.2 What Is Leverage Decay (J-Factor)?
J-factor is Dimes' systematic leverage decay mechanism. It progressively reduces your effective leverage as your position approaches the hazard window, ensuring that facility exposure reaches zero before the window begins.
7.3 How Leverage Decay Works
When you open a position, Dimes computes a de-risking schedule based on:
Time remaining until the hazard window
Current and historical liquidity patterns in the market
Concentration of open interest
As your position ages:
Maximum allowable leverage declines along a predetermined curve
When your position's current leverage exceeds the new maximum, Dimes automatically reduces your exposure
The reduction is executed at prevailing market prices, with execution costs deducted from your collateral
By the time the hazard window begins, your leveraged exposure has been fully unwound. You may retain a residual unleveraged position (equivalent to your remaining collateral), but no borrowed capital remains at risk.
7.4 You Cannot Opt Out
Leverage decay is mandatory. You cannot disable it, override it, or request an exception. It applies to all positions in markets with defined hazard windows.
7.5 Impact on Your Position
Leverage decay reduces your exposure before resolution. This means:
If you are on the winning side, you capture gains on a declining exposure as the market approaches resolution
If you are on the losing side, decay reduces your loss exposure before final settlement
In observed operation, users on the winning side have retained approximately 80% of their initial leverage intent through resolution, capturing the majority of their expected profit. Users on the losing side benefit from automatic de-risking that limits their downside.
Fees
8.1 Fee Structure
Multiply charges the following fees:
Fee
Basis
Rate
When Charged
Origination fee
% of notional exposure
1.0% - 1.5%
At position entry
Time-based fee
APY on borrowed amount
20%
Accrues continuously; deducted at close
Liquidation fee
% of remaining equity
10%
At liquidation only
8.2 Origination Fee
The origination fee is charged when you open a position. It is calculated as a percentage of your total notional exposure and scales with leverage. The fee is deducted from your collateral at entry.
Example:
You post $1,000 collateral at 5x leverage
Notional exposure: $5,000
Origination fee at 1.0%: $50
Your effective starting collateral: $950
8.3 Time-Based Fee
The time-based fee accrues continuously on the amount Dimes has lent you (your notional exposure minus your collateral). It is expressed as an APY but charged proportionally based on how long your position is open.
Example:
Notional exposure: $5,000
Your collateral: $1,000
Borrowed amount: $4,000
Time-based fee: 20% APY
Position duration: 3 days
Fee accrued: $4,000 × 20% × (3/365) = $6.58
The time-based fee is deducted from your collateral when you close your position.
8.4 Liquidation Fee
The liquidation fee is charged only if your position is liquidated. It is calculated as 10% of your remaining equity after execution costs. If you close your position voluntarily, no liquidation fee applies.
8.5 Venue Fees and Execution Costs
In addition to Dimes' fees, you bear all venue fees and execution costs:
Spread: The difference between bid and ask prices on the underlying market
Slippage: The difference between expected and actual execution price
Venue fees: Exchange fees charged by Kalshi or Polymarket (where applicable)
Gas costs: Blockchain transaction costs (where applicable)
These costs are deducted from your collateral at position entry and exit. They are not retained by Dimes — they are paid to venues or consumed by market impact.
8.6 Fully-Loaded Quotes
When you request a quote, the front-end displays a fully-loaded execution cost that includes:
Origination fee
Estimated spread and slippage
Estimated venue fees
The quote you see is the price you pay. There are no hidden fees.
Order Handling
9.1 How Orders Are Processed
When you submit an order:
Quote request: The front-end requests a quote from Dimes based on your selected market, direction, size, and leverage
Pre-trade checks: Dimes verifies:
Market is eligible (not in close-only, not approaching hazard window)
Liquidity supports your order size within slippage bounds
Per-market and per-side caps have headroom
Your collateral is sufficient for initial margin plus fees
Quote returned: Dimes returns a quote including:
Entry price
Maximum available size
Implied liquidation price
Total fees
Position constraints
You confirm: You review and accept the quote through the front-end
Hedge execution: Dimes executes the hedge on the external venue
Position created: If the hedge fills within acceptable bounds, your position is created and confirmed
Or rejected: If the hedge does not fill or slippage exceeds limits, the order is rejected and your collateral is returned
9.2 Hedge-First Execution
Dimes operates a hedge-first model. Your position is only created after the corresponding hedge has been successfully executed within acceptable bounds.
This means:
There is no risk of creating exposure that cannot be hedged
If venue liquidity disappears between your quote and execution, your order is rejected — not filled at a worse price
You are never exposed to unhedged risk
9.3 No Partial Fills on Entry
Orders are filled in full or not at all. Dimes does not create partial positions. If the full size cannot be hedged within slippage bounds, the entire order is rejected.
9.4 Order Rejection
Your order may be rejected for any of the following reasons:
Market is ineligible or in close-only state
Insufficient liquidity to execute within slippage bounds
Per-market or per-side concentration caps reached
Hedge execution failed or timed out
Venue unavailable or degraded
Collateral insufficient for margin plus fees
If your order is rejected, your collateral is returned in full. No fees are charged for rejected orders.
9.5 Order Timeout
If a hedge cannot be confirmed within a defined timeout period (typically seconds), the order is automatically rejected. You do not need to wait indefinitely for a fill.
Closing Your Position
10.1 Voluntary Close
You can close your position at any time through the front-end (unless the market is suspended). When you close:
Dimes unwinds the hedge on the external venue
Execution costs (slippage, fees) are deducted from your collateral
Accrued time-based fees are deducted
Your remaining collateral plus any profit (or minus any loss) is returned to you
10.2 Close Execution
Closing follows the same execution standards as opening:
Dimes executes the unwind on the venue where the hedge was originally placed
Slippage and venue fees are deducted from your collateral
If the market has moved significantly, execution costs may be higher than at entry
10.3 Close-Only State
If a market enters close-only state (due to eligibility breach, circuit breaker, or approaching hazard window):
You can close your position
You cannot add to your position
New positions cannot be opened in that market
Close-only state may be temporary (if conditions recover) or permanent (if the market is approaching resolution).
10.4 Settlement
If you hold a residual unleveraged position at market resolution (after leverage decay has completed), settlement proceeds normally:
The market resolves to its final outcome
If you held the winning side, you receive the settlement value
If you held the losing side, your position is worth zero
Settlement is handled by the underlying venue (Kalshi or Polymarket), not by Dimes.
Risk Disclosures
11.1 You Can Lose Your Entire Collateral
Leveraged trading carries significant risk. If the market moves against you, you can lose some or all of your collateral. With higher leverage, smaller adverse moves result in larger percentage losses.
11.2 Liquidation Can Happen Fast
Markets can move quickly. Liquidation is triggered automatically when margin thresholds are breached. There is no warning, no grace period, and no opportunity to add collateral. You may be liquidated within minutes or seconds of a market move.
11.3 Execution Costs Reduce Your Returns
Every position incurs execution costs — spread, slippage, venue fees, and Dimes' fees. These costs reduce your net profit on winning trades and increase your net loss on losing trades. On short-duration trades or trades in less liquid markets, execution costs may be a significant percentage of your collateral.
11.4 Leverage Decay May Reduce Your Profit
If you are on the winning side of a trade approaching resolution, leverage decay will reduce your exposure before final settlement. You will capture most — but not all — of the potential profit from a move that continues in your favor.
11.5 Markets Can Become Ineligible
A market that is eligible today may become ineligible tomorrow. If you have an open position in a market that becomes ineligible, your position may be reduced or closed by Dimes, potentially at unfavorable execution prices.
11.6 Venue Risk
Dimes executes hedges on external venues (Kalshi, Polymarket). These venues may experience:
Outages or degraded performance
Data feed delays or errors
Execution failures
Changes to fee structures or market rules
Regulatory actions affecting availability
Dimes monitors venue health and takes protective action (close-only states, circuit breakers) when issues arise, but venue problems may still affect your position.
11.7 Smart Contract and Technology Risk
Dimes' systems rely on software, including smart contracts. Software may contain bugs, vulnerabilities, or errors. While Dimes implements security controls and testing, no system is immune to failure.
11.8 Regulatory Risk
Prediction markets are an evolving regulatory area. Changes to laws or regulations could affect the availability of certain markets, venues, or the Multiply product itself.
11.9 No Guarantee of Profit
Past performance is not indicative of future results. Dimes makes no representations about the profitability of leveraged trading. Most leveraged traders lose money.
Circuit Breakers and Protective Measures
12.1 What Are Circuit Breakers?
Circuit breakers are automatic controls that activate when predefined conditions are met. They halt new risk creation immediately to protect the integrity of the system.
12.2 Market-Level Circuit Breakers
A market may be placed in close-only state or suspended if:
Depth, spread, or price stability breach eligibility floors
Data becomes stale or unreliable
Anomalous trading activity is detected
The hazard window is imminent
12.3 Venue-Level Circuit Breakers
All markets on a venue may be affected if:
The venue experiences elevated latency or error rates
The venue is experiencing an outage
Data feeds from the venue are stale or inconsistent
12.4 System-Wide Circuit Breakers
In extreme cases, Dimes may halt all new position creation across all markets if:
Multiple venues are degraded simultaneously
A critical system failure is detected
A security incident is identified
12.5 What Happens When a Circuit Breaker Activates
When a circuit breaker activates:
No new positions can be opened in affected markets
Existing positions can be closed (unless the market is fully suspended)
Liquidations continue to execute to protect the facility
The front-end displays the affected markets and the reason for the restriction
Circuit breakers deactivate automatically when conditions return to normal and recovery is sustained.
Data and Pricing
13.1 Price Sources
Dimes uses prices from the underlying venues (Kalshi, Polymarket) for:
Quoting and entry pricing
Mark-to-market valuation
Margin calculation
Liquidation triggers
Dimes does not use external oracles for prediction market pricing. Venue data is the authoritative source.
13.2 Mark Price
Your position is marked to market continuously using the venue's current price. Your displayed PnL, margin status, and liquidation price all update in real time based on the mark price.
13.3 Stale Data Handling
If price data becomes stale (no update for longer than the defined threshold):
The market enters close-only state
Margin calculations use the last known valid price
Liquidations proceed only if price can be confirmed