The Defi 'Lend and Borrow' LOOPING Strategy (for more leverage)

I I think this video is going to be really valuable whether you have a smaller amount of capital and you're looking to get more exposure to the markets you're looking to take on Leverage in a healthy non- Deen way where you don't wake up liquidated the

next day so you want to make you want to make more use out of what you have or you maybe have a lot of capital and you also want to make more use out of it because yields are yields and if you can make if you have $100,000 and you can

have $150,000 of exposure in a way that you're not stressing out waking up 10 times at night wondering if you're going to get liquidated how do you do it in a healthy Manner and Gordon's going to walk us

through uh a really good example in FastTrack is something that a lot of Fast Track clients have been doing and I think it' be really valuable for you so Gordon take it away yeah absolutely thanks Lucas I think it's also worth

reiterating before diving in that this strategy works best when we have kind of a bullish bias on the market and you know with a lot of the events that are

happening over the past week or so um new rate Cuts we are you know we all have a little bit of a bullish bias inside the uig right now and we're

excited for the next 6 to 12 months and David posted this looping strategy article and we spoke about this with the FastTrack crew over the past couple days and it's really about what you were

alluding to it's about how do I get more exposure to the assets that I'm already fundamentally bullish on and the idea with this interest amplification cycle

is that When We're looping we're supplying an asset that we're bullish on let's say Bitcoin as an example we're then borrowing stable coin against that

Bitcoin we're then using that stable coin to purchase even more Bitcoin and then we can Loop that as many times as we want obviously it's worth noting the

more times we Loop this the more risk we're taking on and we want to keep the health factor of our Loop and L borrow strategy pretty safe and not over

leverage ourselves but when this is done strategically Ally Lucas as you know it can be a great way to get more exposure to the assets that we are fundamentally bullish on maybe speak risk for anyone

who who maybe heard that it's like hey well what is the risk why do I take on more risk every time I Loop it why is it more risky if we're talking Bitcoin and stable coins could you talk to that if

someone's wondering definitely yeah so normally we recommend taking on something around 40% loan to value ratio when we execute this first uh L borrow

piece of the strategy and the reason that we're taking on more risk as we continue to Loop is because we're getting more exposure to let's say the

asset like Bitcoin in this case in this example but we're also taking on more debt against the original collateral that we're supplying so if we start off with $10,000 worth of bitcoin and we

keep looping we're Levering up our exposure and if Bitcoin drops in price even a small bit after we've looped excessively then we could end up getting

liquidated so we could lose our Capital if Bitcoin drops in price too dramatically so this is why we want to make sure that firstly we're fundamentally bullish on the market if we're doing this with let's say Bitcoin

and secondly we don't Loop too many times because we only have a certain amount of collateral we're putting up in the first place and we don't want to get liquidated a little there people can think of it almost like they're house is

like well I think people are traditionally used to putting 10% or 20% down on their house but I mean houses price traditionally don't fluctuate much more than 10% 10% is like horrible um

Bitcoin can see larger fluctuations so if you're thinking I'll just put 10% down and take a you know a huge loan against my Bitcoin I just know crypto markets are much more volatile than your

house much more volatile absolutely so I wanted to share a quick example of how this works in practice because I'm executing this over on moonwell as one example so moonwell is a base protocol

for Lending and borrowing and and in this instance I am supplying some Arrow so I'm bullish on the Arrow token and I want to hold Arrow as part of my Bull

Run bag but what I'm doing here is I'm supplying arrow on moonwell and I'm actually earning 177% just for supplying that on the moonwell platform and then

I'm able to use that 10K worth of Arrow to borrow stable coin against so I've borrowed roughly $3,200 against that 10K worth of AR

so you know roughly speaking I'm at about a 32% loan to value ratio there and then I'm using that 10 or I'm using that borrowed Capital to purchase even

more arrow and in this example I'm looping that but I'm actually I've purchased more arrow and I've deployed the new Arrow over on extra fi and the

reason I've done that is because I'm benefiting or strategically using the different apys and the better apy on extra for this additional arrow that

I've purchased with the borrowed capital and the benefit of that is that I get 21% on extra five versus 177% on Arrow

sometimes that discrepancy is even greater but extra fi doesn't allow me to borrow against it so I'm using moonwell to borrow get that extra usdc purchase

more Arrow put it on extra and then the real bet I'm making here Lucas is the fact that I'm bullish on Arrow and I'm betting on the price appreciation of Arrow

over the next 6 to 12 months and I'm getting more exposure to this asset that I'm fundamentally bullish on I love it anyone watching just know it doesn't have to be arrows sometimes on YouTube

I'm a little bit like ah there's so much lacking context and conversation around this don't just copy this think about what assets are you bullish on and um how much leverage would you be willing

to take if you are and if you're not then just don't do it it's not the end of the world just don't take on any leverage but if you got a little more EXP experience and you've been in the markets for a while or you just want to

get more of what you got you could think Bitcoin and eths you could think arrows maybe there's some other stuff that you're bullish on you just want to kind of lever up that's what we're

fundamentally doing here so I love it thanks Gordon absolutely my pleasure I think like you said don't over risk yourself that's a big disclaimer on the video but this strategy works very well

when the market is is is bullish and and you're using your leverage and your risk level strategically have you ever played on those I did like you could take on 50 leverage 50x leverage with a click of a button on some of those perss like um

what did I used to do it on what was the big one back in the day that like just did really well during the last bare Market um I'm not sure name the name is escaping me yeah anyway it was like I

remember playing with it I put a $100 in I could get like $5,000 worth of something but if something moved by a penny you were obviously liquidated instantly but there was a few wins it it

gets addictive and I just don't want people reging this stuff because it can get addictive and people get hurt if you take on too much leverage so play accordingly uh with that said like

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and buying assets that they know nothing about like we're going to see the same pattern and we just I know that's awesome for YouTube and it gets a lot of views we just want to bring like let's be investors and let's play the long

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