Leverage Strategies

What are leverage strategies

Mystic enables you to easily leverage your assets, which effectively means we enable you to borrow more from Mystic to amplify your positions. Let's illustrate this with an example - imagine you have 1 wstETH and want further exposure to the asset. You would borrow USDC with it and then swap it for more wsETH, meaning you have now increased your wsETH position (counting your collateral). Leverage enables you to do that, increasing your exposure many-fold of what your initial position is. This can be used to facilitate several trading strategies, like DeFi looping and Margin Trading. Mystic enables you to 1-click deploy these strategies, so you can multiply both your exposure and your assets.

Why leverage strategies

We built leverage strategies for two reasons - liquidity sharing and convenience. On one hand, liquidity is DeFi's main bottleneck and also its living blood. Enabling custom strategies to be built on top of Mystic means third-party protocols can now tap into Mystic's liquidity by creating their own strategies, without having to bootstrap liquidity or raise via backroom TVL deals. This will not only dramatically accelerate both Mystic's supply and borrow activity, but directly help solve one of DeFi's biggest issues - the cold-start problem.

In addition to this, convenience is a big factor. Trading on leverage is often done manually by repeatedly doing the same things over and over again to achieve one's strategy (e.g. borrow, swap, borrow again to achieve 1x leverage, and so on). As much of DeFi is built on leverage, it is essential this can be done seamlessly and automatically. That is exactly what Mystic enables with strategies - an automated, user-friendly way to achieve leverage, the DeFi-native way.

Want to see how you can get started with leverage? See our User Guide.