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:

  1. Supply tsTON to EVAA or Factorial lending protocols on TON.
  2. Borrow TON against your collateral.
  3. 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.

Chart (3).png

After 5 loops, the resulting APY reaches approximately 9.7%.