What is Leveraged Staking or Looping?
Leveraged staking is a DeFi strategy that involves using tsTON as collateral to borrow and stake more TON, increasing a user’s total stake and rewards.
How to stake TON with leverage?
You can start leveraged staking with Tonstakers Earn.
To use leveraged staking:
- Supply tsTON to EVAA or Factorial lending protocols on TON.
- Borrow TON against your collateral.
- Stake the borrowed TON to receive more tsTON.
This cycle is called a loop. Repeating it compounds your exposure — hence the name “looping.”
How does leveraged staking affect staking rewards?
Assuming:
- Staking APY = 4%
- Borrowing rate = 1%
- Collateral ratio = 66%
Each loop lets you borrow 66% of your tsTON’s value and earn a 3% net yield (4% - 1%) on it.
After 5 loops, the resulting APY reaches approximately 9.7%.
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