# Looping (Leveraged Restaking)

## Intro

Loop accepts [an array](https://docs.loopfi.xyz/the-protocol/broken-reference) of liquidity provider tokens from [Pendle](https://www.pendle.finance) Liquid Restaking strategies as collateral. Users can borrow *ETH* (i) to automatically acquire additional collateral, thus establishing a leveraged position. Loopers are required to vigilantly monitor the loan-to-value threshold and interest rate assigned to each collateral asset to maintain the health of their position.

{% hint style="info" %}
ETH cannot be borrowed manually. Instead it is used in the background to automatically loop/leverage supported collateral.
{% endhint %}

## Boost

Note: will be live after the TGE. 

Loopers maintaining a dynamic Liquidity (dLP) value that exceeds 5% of their `Total Position Size` qualify to receive *LOOP* token emissions, which can offset the cost of borrowing interest. For users with multiple looped positions, it is necessary to exceed the 5% threshold across the aggregate of all positions to activate any enhancement. It is not possible to apply a boost to just one position. Further details about the Boost and the *dLP* mechanism are available on the [dLP page](https://docs.loopfi.xyz/the-protocol/dlp-locking-dynamic-liquidity-and-boost).

{% content-ref url="dlp-locking-dynamic-liquidity-and-boost" %}
[dlp-locking-dynamic-liquidity-and-boost](https://docs.loopfi.xyz/the-protocol/dlp-locking-dynamic-liquidity-and-boost)
{% endcontent-ref %}

## Rewards and Fees

### **Yield**

The Base Yield leveraged from the collateral automatically accumulates within the collateral itself, enhancing the `Total Position Size` and `Net Position Value`. A profitable carry trade is contingent upon the yield from the collateral surpassing the interest rate charged.

### **Boost**

LOOP emissions acquired through Boosting need to mature over a 90-day vesting period. The vesting process incorporates a progressively decreasing penalty for early withdrawals, starting with a 90% reduction and diminishing to 25% over this period. This design encourages participants to commit to the full vesting duration, thereby optimizing their potential rewards.

If a user opts to Zap their maturing rewards into the dLP, they must contribute 20% in *lpETH* and lock it alongside their *LOOP* rewards for a minimum of three months. This commitment not only yields platform revenue but also secures eligibility for additional *LOOP* emissions from lending and borrowing activities, particularly if the 5% threshold is no longer met.

### **Fees**

The sole fee imposed is the interest on borrowed *ETH*. This dynamic interest rate is derived from the [utilization rate](https://docs.loopfi.xyz/the-protocol/broken-reference), reflecting the proportion of *ETH* available in the Reserve Pool. Users can track the fluctuating interest rate through the position overview, ensuring transparency and informed decision-making.

## Risks

The primary risk for Loopers is the potential for liquidation, which can occur due to two main factors:

1. The underlying asset depegs and threatens the Minimum Collateral Ratio (LTV).
2. The interest charged exceeds the base yield of the collateral and the debt increases to a threshold that threatens the Minimum Collateral Ratio.

Additionally, it's important to consider the liquidity of the underlying assets involved in the strategy to minimize significant price impacts when initiating or unwinding loops.