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LST Looping Strategy

Leverage liquid staking tokens through recursive borrowing to amplify staking yields.

Typical APY Range8% - 20%

What Is LST Looping?

LST looping amplifies liquid staking returns by recursively borrowing against LSTs. Deposit stETH as collateral, borrow ETH, stake for more stETH, repeat. Boosts base 3-4% yields to 8-15% or higher.

Deposit stETH on Aave or Morpho. Borrow ETH. Stake for more stETH. Repeat to target leverage. With 3x leverage and 2% spread, approximately 10% APY total.

Choose platform: Aave V3, Morpho, or Spark. Target leverage: 2x conservative, 2.5-3x moderate, 3-4x aggressive. Monitor health factor continuously.

Liquidation risk is primary if stETH depegs. Rate spread compression can make loops negative. Only use funds you can afford to lose.

Execute with Fensory.

How to Get Started

  1. 1Acquire LSTs
  2. 2Deposit as collateral
  3. 3Borrow ETH
  4. 4Stake for more LST
  5. 5Repeat to target leverage
  6. 6Monitor health factor

Pros

  • ✓Amplifies staking yields
  • ✓Capital efficient
  • ✓Automation available
  • ✓Can unwind

Cons

  • ✗Liquidation risk
  • ✗Rate spread compression
  • ✗Constant monitoring
  • ✗Gas costs

Compare leveraged yields across trusted protocols.

Track live yields, compare protocols, and build your DeFi portfolio with Fensory.

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