# CFD Abstraction

<mark style="color:$info;">Multiply implements a Contract for Difference abstraction to deliver leveraged directional exposure on prediction markets without requiring users to manage collateral, custody, or cross-venue settlement themselves. Positions are represented onchain as synthetic instruments whose value references external market prices, while margining, PnL, and settlement remain fully native to Solana.</mark>

<mark style="color:$info;">Each position follows a bounded synthetic payoff:</mark>

> <mark style="color:yellow;">`CFD PnL = (Pnow − Pentry) × Leverage × Size`</mark><mark style="color:$info;">, bounded by the 0 → 1 settlement range of the underlying prediction market.</mark>

<mark style="color:$info;">where prices reference external market quotes and outcomes are constrained by the 0 to 1 settlement range of binary contracts. This bounded structure allows leverage to be offered in a controlled way, with deterministic maximum loss and well-defined liquidation behavior.</mark>

<mark style="color:$info;">While positions are synthetic, Multiply maintains a continuous mapping between onchain exposure and equivalent market participation. For every trade, the protocol tracks effective notional, implied share exposure, and venue attribution.</mark> **This data can be surfaced to terminals for leaderboards, activity feeds, and incentive programs, and preserved for downstream reconciliation.**

<mark style="color:$info;">From the perspective of the ecosystem,</mark> **Multiply acts as an aggregation and risk management layer** <mark style="color:$info;">rather than a replacement trading surface. Synthetic exposure is derived from, and continuously priced off, live venue markets, and</mark> **hedging activity flows back to underlying venues** <mark style="color:$info;">during hedgeable periods.</mark> **Front-ends retain full control of the user relationship and experience**<mark style="color:$info;">, while Multiply handles leverage, margining, and risk internally. Users obtain the economic effect of leveraged exposure, with all collateral, PnL, and settlement managed onchain in a single environment.</mark>