Learn / Strategies
Looping
Borrowing against a staked token to buy more of it, for a bigger yield and much bigger risk.
Video coming soon
In plain words
You supply a staked token like JitoSOL, borrow SOL against it, swap the SOL into more JitoSOL, and repeat. You earn the staking yield on more than you put in, but pay the borrow rate on the loan.
It only pays while the staking yield beats the borrow rate. If borrow rates jump or the staked token slips against SOL, you can lose money or be liquidated. DefiLab labels every loop very high risk.
Worked example
At 2x, JitoSOL earning 4.88% with SOL borrowing at 5.55%: 4.88 × 2 − 5.55 × 1 = 4.21%. That's less than just holding JitoSOL, because borrowing costs more than staking pays.
See loops in the yield lab →Examples use sample numbers. Estimates, not advice.