Leverage trading will let eligible users increase their market exposure by posting pUSD as collateral while Dimes Multiply funds and manages the remaining position size.
Multiply is Dimes’ prediction-market leverage product. It gives trading terminals like Ares the ability to offer leveraged exposure on external prediction markets without building leverage, liquidity, hedging, and risk infrastructure from scratch.
Leverage increases both potential upside and potential downside. This page is for educational purposes only and does not guarantee access, returns, execution, or protection from losses.
Who provides the leverage liquidity?
Leverage liquidity is provided through Dimes Multiply, a middle-layer protocol built for leveraged prediction-market exposure.
Multiply is supplied by a committed credit facility backed by three institutional credit partners.
These partners include a mix of private credit funds and crypto-native funds. Collectively, they manage more than $1B in financing capacity across their broader mandates.
Individual partner names are not publicly disclosed for competitive reasons.
Importantly, this is a committed facility, not a pool-based TVL model. That means leverage liquidity is not dependent on retail depositors entering or leaving a pool.
What collateral will I need?
pUSD will be the collateral asset for leveraged positions.
When you open a leveraged trade, you post pUSD as margin. Dimes Multiply funds the remaining notional exposure through its credit facility.
For example, if you open a $1,000 position at 3x leverage, you would post about $333 in pUSD as margin. The remaining $667 would be funded through the credit facility.
How does leverage work in prediction markets?
Leverage in prediction markets is different from leverage in traditional crypto or perpetual futures markets.
Prediction markets have a few unique risk factors:
- Markets can be thinner
- Prices move between 0 and 1
- News, sports, polls, and other real-world events can cause sudden price jumps
- Liquidity can change quickly as markets approach resolution
Because of this, prediction-market leverage requires active risk management instead of relying only on a static liquidation threshold.
Dimes Multiply manages this through an internal risk framework called the J-factor.
What is the J-factor?
The J-factor is Multiply’s dynamic risk model. It continuously monitors leveraged positions and adjusts exposure as market conditions change.
If a position moves against a user, the system can gradually reduce the position’s leveraged exposure before a full liquidation becomes necessary.
The model looks at market structure signals such as:
- Bid depth
- Spread width
- Open interest concentration
- Reflexivity
- Market liquidity near resolution
- How quickly new information is changing the market
The goal is to actively reduce risk when a position becomes more fragile, especially in fast-moving or thin-liquidity markets.
What happens if my position moves against me?
If your position moves against you, the system is designed to progressively reduce your leveraged exposure as risk increases.
In practical terms, that means the expected outcome for many losing positions is a gradually reduced position, not an immediate full liquidation.
As exposure is reduced, the liquidation threshold moves farther away from your entry price.
For a YES position, the liquidation threshold can move lower as the system deleverages. For a NO position, it can move higher. The purpose is to increase the buffer between your remaining position and liquidation.
Liquidation can still happen in extreme cases, especially if a market moves faster than the model can safely adjust. But liquidation is treated as a last resort, not the primary risk mechanism.
Why does this matter for prediction markets?
Prediction markets can move sharply when new information arrives.
For example, in a sports market, one goal near the end of a game can completely change the market’s implied probability. At that point, both sides of the market may become riskier, especially if liquidity gets thin and resolution is close.
The J-factor is designed to respond to those moments by reducing exposure when market conditions become less stable.
What price will I be liquidated at?
Your position will show a current liquidation price and buffer.
Because Multiply can dynamically reduce exposure, the liquidation threshold can change as the position is managed.
If a position moves against you, the system may reduce exposure before the original liquidation threshold is reached. As that happens, the liquidation threshold can move farther away from your entry price.
This means the system is designed to make liquidation less likely as risk rises, though it cannot eliminate liquidation risk completely.
Ares may also surface margin warnings, recommended collateral top-ups, or prompts to reduce exposure when a position gets close to liquidation.
The origination fee is a one-time fee charged when you open a leveraged position. It is based on total notional position size and depends on the leverage used.
- 2–4x leverage: 2.00%
- 5–7x leverage: 2.25%
- 8–10x leverage: 2.50%
Financing fee
The financing fee is a time-based fee charged on the borrowed portion of the position.
The expected daily rate is approximately 0.05%, prorated based on how long the position remains open.
Liquidation fee
A liquidation fee only applies in the rare event of liquidation.
If there is remaining equity after the loan is repaid, the fee is 10% of the remaining loan value and is deducted from proceeds.
If there is no remaining equity, the trader does not owe bad debt. The shortfall is absorbed by the facility’s first-loss buffer.
How to use leverage when trading PMs
Leverage magnifies volatility and raises execution costs. On prediction markets it's the wrong tool for most setups.
Here are the market types I find best and worst suited for levered trading.
Best (simplest to most advanced)
High conviction bet on a strong favorite. A market at $0.82 with 5x turns an 18¢ move into ~80-90% return on collateral. Downside isn't symmetric: J-factor deleverages on its own on the bear case.
Longshots on the upswing. Enter just after the inflection, not before. Book depth expands on your side, so leverage holds.
Post-shock re-entry. A favorite drops from $0.85 to $0.60 on news you read as an overreaction.
Hedging an unlevered position. You hold a large unlevered YES at $0.70. New information worries you but you don't want to sell. A small levered NO is a cheap hedge: it pays outsized if the market drops, and if it doesn't, J-factor decay caps the cost of being wrong.
Arbitrage across correlated markets. Two markets that should move together (say "Will X win the nomination" and "Will X win the general") sometimes misprice against each other. Leverage the spread.
Worst
Tight markets that drag on. In a 50/50 to 60/40 range, every oscillation triggers partial deleveraging that doesn't rebuild on the swing back. Three oscillations before resolution can leave you with 20% of theoretical levered PnL on a trade you got right. Not worth the fees or the exposure.
Passive holds through reversal-heavy markets. Every narrative shift ratchets away collateral. Each move against you deleverages, realizing losses on the unwound portion and cutting both your leverage and your remaining stake. When the market recovers you ride it with less of both. You can be right on direction and still end up negative.
Bottom line: on prediction markets, leverage is an instrument for momentum and dislocation, not for passive holds. Use it that way.
Learn more
For deeper technical documentation, see the official Dimes Multiply docs:
Key takeaway
Leverage trading on Ares is designed to give users more buying power while accounting for the unique risks of prediction markets.
Instead of relying only on static liquidation prices, Multiply dynamically adjusts exposure as market conditions change.
More exposure means more opportunity, but it also means more risk. Trade size, leverage, and collateral should be managed carefully.