Leverage Strategies

Different leverage strategies work in different ways. Below you will find guides on how to use our different strategies as they are released.

Looping

Looping is one of the most popular strategies in DeFi, which powers a lot of TVL across chains and protocols and is DeFi leverage in its crudest form. In a nutshell, looping encompasses repeatedly using one's asset to borrow another one, then swapping that for the initial collateral to then repeat the same process all over again. Repeated n times, this gives the user nx exposure to the desired asset.

Here's how to leverage loop on Mystic:

• Head over to the "Strategies" tab.

• Find the pair you want to loop, meaning the one which has both the initial asset you're already holding and the asset you want to borrow against it. Click "View Details".

• You will now see the looping modal. Here, you can select the size of your initial position (how much you're depositing) as well as how much leverage you want (the number of times you will borrow against your asset, swap it back for collateral and repeat). More leverage will mean more yield, but be careful not to take a position too risky that it becomes likely to be at risk for liquidation.

• Before going through with your transaction, be sure to confirm all relevant details about your position - the amount you're putting in, the total debt you're taking on and at what price will your position be at risk of liquidation.

• Once you're comfortable with those details, press "Confirm". You will have made a leveraged position.

Don't forget that, over time, your position accumulates debt. Since you have made a leveraged position, that means you are additionally exposed to fluctuations in price. In leveraged positions more than ever, it is crucial you actively manage your position and keep track of it on your dashboard.