Loop deposits and borrows to amplify yield exposure.
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Typical APY range5% - 30%
What is Recursive Lending?
Recursive lending (also called looping) involves depositing an asset, borrowing against it, depositing the borrowed amount, and repeating. This amplifies your exposure to supply APY and any token incentives.
How It Works
Deposit ETH as collateral on Aave
Borrow ETH (e.g., 80% LTV)
Deposit the borrowed ETH
Borrow again against new deposits
Repeat until target leverage reached
Example
Deposit 1 ETH
Borrow 0.8 ETH, deposit again
Borrow 0.64 ETH, deposit again
Total exposure: ~3-4 ETH from 1 ETH deposit
Risk Management
Liquidation: Leveraged positions amplify liquidation risk
Rate Changes: Borrow rates can exceed supply rates
Smart Contract: Using same asset reduces some risks
Track leveraged positions with Fensory.
How to Get Started
1Choose asset with positive supply-borrow spread
2Deposit initial collateral
3Borrow same asset at safe LTV
4Redeposit borrowed amount
5Repeat to target leverage
6Monitor health factor closely
Pros
✓Amplified yield exposure
✓Works with token incentives
✓Same-asset loops reduce liquidation risk
Cons
✗High liquidation risk if spread inverts
✗Complex position management
✗Gas costs for setup/unwind
Ready to try leveraged? See current 5-30% APY opportunities.
Track live yields, compare protocols, and build your DeFi portfolio with Fensory.