DeFi Looping Strategy: How Loop Vaults Amplify Your Yield
Loop Vaults are Superlend's one-click leveraged yield product. Instead of manually executing multiple transactions to loop your position, Loop Vaults automate the entire process – depositing, borrowing, and redepositing to amplify your yield exposure.
Superlend is a non-custodial aggregator connecting you to 350+ money markets across 11+ chains. Loop Vaults build on this foundation, offering automated leveraged strategies on Etherlink that can significantly outperform simple supply-only lending.
What Is a DeFi Looping Strategy?
A DeFi looping strategy involves borrowing and re-depositing assets to increase your exposure and amplify returns. Loop Vaults automate this entire process.
How it works:
- You deposit one token (the vault's base token)
- The vault handles the rest in the background
Step-by-Step Process:
- Deposit the vault's base token (e.g., XTZ) or another supported token, which will be swapped for you.
- Receive vault shares representing your portion of the vault's total assets.
- The vault "loops" your position by borrowing and reinvesting to boost potential yield.
- Withdraw anytime – instantly if there's enough liquidity, or schedule a withdrawal if funds are in active strategies.
Two Ways to Execute Your DeFi Looping Strategy
Automated Loop Vaults
Deposit, relax, and let the vault optimize your position for you. Great for those who want hands-free yield without daily management.
Manual Loop Markets
For advanced users who want to control leverage, strategy, and risk levels directly. Fine-tune your DeFi looping strategy to match your risk tolerance.
Why Use a DeFi Looping Strategy?
Using traditional lending (supply-only route) can leave yield potential on the table. Looping helps unlock more from your assets.
Benefits of looping:
- Boost returns – Looping increases exposure and earning potential
- Save time – Automated vaults manage strategies for you
- Stay flexible – Withdraw instantly or schedule it as needed
- Choose your style – Go automated or manual, depending on your preferences
Rates are variable and subject to change. Leveraged positions carry additional risk of liquidation. Only use funds you can afford to lose.
Safety and Withdrawals
Loop Vaults are built with user control and transparency in mind:
- Instant withdrawals – Available when the vault has enough liquidity
- Scheduled withdrawals – If funds are in active loops, place a request and the vault will unwind to free them up
- Built-in safeguards – All strategies are audited and follow risk parameters to avoid unsafe leverage
Who Benefits from DeFi Looping Strategies?
Looping is for anyone looking to make their assets work harder:
- Passive earners who want higher returns with no daily management
- Active traders who want to fine-tune loop levels and capture more upside
- DeFi newcomers who want access to advanced strategies without complex setups
Coming Soon to Loop Vaults
- Historical performance and PnL history
- Daily earnings and APY trends
- User transaction and rebalance stats
- 1-click batched transactions for smoother operations
- Faster, smoother UX
- Expansion of Loop Vaults and Manual Loop Markets
Getting Started with Your DeFi Looping Strategy
- Visit the Vaults section on Superlend
- Select your approach:
- Automated Loop Vault – hands-free strategy managed by the vault
- Manual Loop Market – control your own loop levels and risk
- Deposit your tokens:
- Use the base token for direct deposit
- Or deposit another supported token and let the vault swap it for you
- Start earning as the vault loops your position to seek higher yield.
It's that simple.
Frequently Asked Questions
What is DeFi looping?
DeFi looping is a strategy where you deposit an asset as collateral, borrow against it, and redeposit the borrowed amount to increase your total position size. This amplifies your exposure to yield-generating opportunities but also increases risk.
Is DeFi looping risky?
Yes, looping involves leverage which amplifies both gains and losses. If the value of your collateral drops below the liquidation threshold, your position can be automatically closed. Loop Vaults include risk controls, but users should only invest what they can afford to lose. For more on DeFi risks and safety, read our guide on Is DeFi Lending Safe.
How are Loop Vaults different from manual looping?
Manual looping requires you to execute multiple transactions, monitor health factors, and manage unwinding yourself. Loop Vaults automate all of this – the vault handles borrowing, redepositing, and risk management automatically. To learn more about how lending protocols work under the hood, check out Understanding Lending Protocols.
Start Your DeFi Looping Strategy Today
Ready to amplify your yield with a professional DeFi looping strategy?
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For more stablecoin yield strategies including non-leveraged options, see our Stablecoin Yield Strategies guide.
This article is for educational purposes only and does not constitute financial advice. Leveraged positions carry additional risk of liquidation. DeFi involves risks including smart contract vulnerabilities. Always do your own research.