Introduction
The Credit Hub for Restaking.
Last updated
The Credit Hub for Restaking.
Last updated
Loop is a dedicated lending market for Ethereum carry trades. Users can supply a long tail of Liquid Restaking derivatives (e.g., Pendle LP tokens) as collateral to borrow ETH for increased yield and points exposure.
A carry trade involves borrowing money in a currency with a low interest rate and then investing it in a currency or asset with a higher interest rate, aiming to profit from the difference in rates. Essentially, it's like borrowing money cheaply to invest in something that pays you more.
The interest charged to borrowers is distributed among ETH-lenders and dLP-lockers, thus rewarding higher protocol-alignment that allows Loop to scale.
Lenders receive back a receipt token, lpETH, that can be used throughout DeFi or be staked to earn passive yield in ETH.
Loopers can borrow ETH against yielding LRT derivatives to perform carry trades for ETH-based yields.
dLP Lockers can lock the protocol’s governance token, LOOP, into a Dynamic Liquidity (dLP) position to earn protocol revenue.
Loopers can offset their borrow costs by locking 5% of their Total Looped Position Size in the dLP in order to effectively receive rebates on interest paid.
By unlocking affordable credit for LRTs and their respective liquidity pool tokens, Loop can level the playing field for all protocols working towards a dynamic market for Ethereum Restaking.
