Looping
Repeatedly depositing and borrowing against the same asset to multiply yield exposure.
In-Depth Explanation
Deposit ETH, borrow stables, swap to ETH, deposit again, repeat. Looping multiplies both yield and risk. If the deposited asset earns 5% and you loop 3x, you earn ~15%—but you're also 3x exposed to liquidation if prices drop. Popular during airdrop farming (more deposits = more points) and when deposit APY exceeds borrow APR.
Related Terms
Leverage
Using borrowed capital to amplify potential returns (and losses) on an investment position.
Liquidation
Forced closure of an undercollateralized position, typically with a penalty to the borrower.
Yield Farming
The practice of moving assets between DeFi protocols to maximize returns from incentives and rewards.
More in Yield
View all →Mercenary Capital
Capital that moves between protocols purely to chase the highest incentives, with no loyalty or long-term commitment.
Annual Percentage Yield
APYThe annualized return on an investment accounting for compound interest.
Annual Percentage Rate
APRThe annualized return on an investment without accounting for compounding.
Real Yield
Yield derived from actual protocol revenue and economic activity, not token emissions or inflation.