Grow Your Position (Conservative Looping)¶

Safely increase your asset holdings through strategic borrowing and reinvestment.

Variable Parameters

All interest rates, prices, health factors, and gas costs in this guide are examples only. Actual values vary based on market conditions and protocol parameters.

Always check current rates in the app before proceeding.

The Strategy¶

The smart way to increase your ETHST holdings:

Instead of buying more ETHST with new capital, use your existing ETHST to borrow stablecoins, buy more ETHST, and repeat. This lets you grow your position while maintaining a healthy safety margin.

Why this works:

✅ Increase ETHST exposure without new capital
✅ Keep health factor safe throughout
✅ Amplify gains if ETHST appreciates
✅ Maintain control of your position
✅ Exit anytime by repaying debt

The loop:

Supply ETHST → Borrow USDST → Buy more ETHST → Supply new ETHST → Repeat

Complete Example: Growing 5 ETHST to 7.5 ETHST¶

Your starting position:

You have: 5 ETHST ($15,000 @ $3,000/ETHST)
You want: More ETHST exposure
Your approach: Conservative looping (2 rounds)

The outcome:

Final position: 7.5 ETHST
Debt: $7,500 USDST
Health Factor: 2.4 (very safe)
Effective leverage: 1.5x
Time needed: 15 minutes

If ETHST goes up 20% to $3,600:

Without looping: 5 ETHST = $18,000 (gain: $3,000)
With looping: 7.5 ETHST = $27,000 (gain: $12,000)
You earned 4x more!

Step-by-Step Implementation¶

Round 1: Initial Position¶

Step 1: Supply Your ETHST (2 min)¶

Go to Borrow (sidebar)
In Collateral Management table, find ETHST → Click "Supply"
Enter amount: 5.0
Click "Supply" (~$0.10 gas, approval automatic)

Result:

✅ Collateral: 5 ETHST ($15,000)
✅ Can borrow: Up to $11,250 (75% LTV)
✅ Health Factor: N/A (no debt yet)

Step 2: Borrow Conservatively (2 min)¶

Conservative approach: Borrow 50% of max (not 75%)

Go to Borrow section
Enter amount: 5,000 USDST (not the max!)
Review:
Health Factor: 2.4 (very safe)
Interest: ~5% = $250/year
Click "Borrow"
Confirm (~$0.10 gas)

Why only 50%?

Leaves room for price drops
Keeps health factor high
Allows for more loops safely

Result:

✅ Borrowed: 5,000 USDST
✅ Health Factor: 2.4 (very safe)
✅ Collateral: 5 ETHST ($15,000)

Step 3: Buy More ETHST (2 min)¶

Go to Swap Assets
From: USDST → Amount: 5,000
To: ETHST
Review quote: ~1.65 ETHST (after 0.3% swap fee)
Click "Swap"
Confirm (~$0.10 gas)

Result:

✅ Received: ~1.65 ETHST
✅ Total ETHST in wallet: 1.65 ETHST
✅ Ready for next loop

Alternative: Diversify Into Other Assets¶

Instead of buying more ETHST, you can diversify your collateral:

Option A: Add Bitcoin Exposure¶

Why BTC? - Different price movements from ETHST - Store of value characteristics - Portfolio diversification

How to do it:

Go to Swap Assets
From: USDST (5,000) → To: WBTCST
Review quote: ~0.075 WBTCST (at ~$65,000/BTC)
Click "Swap"
Go to Borrow page
Supply WBTCST as collateral
Continue looping

Result:

✅ Collateral: 5 ETHST + 0.075 WBTCST
✅ Diversified portfolio
✅ Different price exposures

Option B: Add Gold Exposure¶

Why Gold? - Safe haven asset - Hedge against volatility - Less correlated with crypto

How to do it:

Go to Swap Assets
From: USDST (5,000) → To: GOLDST
Review quote: ~1.9 GOLD (at ~$2,600/oz)
Click "Swap"
Go to Borrow page
Supply GOLDST as collateral
Continue looping

Result:

✅ Collateral: 5 ETHST + 1.9 GOLDST
✅ Crypto + precious metal
✅ Risk diversification

Option C: Add Silver Exposure¶

Why Silver? - Industrial metal demand - Lower cost entry - Different market dynamics

How to do it:

Go to Swap Assets
From: USDST (5,000) → To: SILVST
Review quote: ~160 SILVER (at ~$31/oz)
Click "Swap"
Go to Borrow page
Supply SILVST as collateral
Continue looping

Benefits of Diversification¶

Risk Management: - ✅ Not dependent on single asset price - ✅ Different correlation patterns - ✅ Hedged portfolio approach - ✅ Reduces concentration risk

Strategy Flexibility: - ✅ Same looping process works - ✅ Mix assets as desired - ✅ Rebalance over time - ✅ Adapt to market conditions

Example Multi-Asset Position:

Starting: 5 ETHST

Round 1:
- Supply 5 ETHST → Borrow $5,000
- Buy 0.075 WBTCST → Supply WBTCST

Round 2:
- Borrow $2,500
- Buy 1.9 GOLDST → Supply GOLDST

Round 3:
- Borrow $1,500
- Buy 160 SILVST → Supply SILVST

Final Position:
- Collateral: 5 ETHST + 0.075 WBTCST + 1.9 GOLDST + 160 SILVST
- Total value: ~$24,000
- Total debt: $9,000
- Health Factor: 2.13 (safe)
- Diversified across 4 assets ✅

When to Diversify:

✅ Want to reduce single-asset risk
✅ Bullish on multiple assets
✅ Prefer balanced portfolio
✅ Long-term holding strategy
✅ Risk-averse approach

When to Stay Single-Asset:

✅ Very bullish on one specific asset
✅ Want simplicity
✅ Easier position management
✅ Clearer exit strategy
✅ Strong conviction trade

Round 2: First Loop¶

Step 4: Supply New ETHST (2 min)¶

Go back to Borrow page
In Collateral Management table, find ETHST → Click "Supply"
Enter amount: 1.65
Click "Supply"

Result:

✅ Total collateral: 6.65 ETHST ($19,950)
✅ Current debt: 5,000 USDST
✅ New health factor: 3.19 (even safer!)
✅ Can borrow more: Up to $9,962

Notice: Your health factor IMPROVED because you added collateral without adding debt!

Step 5: Borrow Again (2 min)¶

Again, borrow conservatively:

Go to Borrow section
Enter amount: 2,500 USDST (keeping HF safe)
Review:
New Health Factor: 2.13 (still safe)
Total debt: $7,500
Click "Borrow"

Result:

✅ Total borrowed: 7,500 USDST
✅ Health Factor: 2.13 (safe)
✅ Collateral: 6.65 ETHST ($19,950)

Step 6: Buy More ETHST (2 min)¶

Go to Swap Assets
From: USDST → Amount: 2,500
To: ETH
Receive: ~0.83 ETHST 5. Click "Swap"

Result:

✅ Received: ~0.83 ETHST ✅ Total ETHST in wallet: 0.83 ETHST

Round 3: Second Loop (Optional)¶

Step 7: Supply Again (2 min)¶

Supply the 0.83 ETHST
New total collateral: 7.48 ETHST ($22,440)
New health factor: 2.39 (very safe)

At this point, you can:

Option A: Stop here (recommended) - Total position: 7.48 ETHST - Total debt: $7,500 - Health Factor: 2.39 - Good balance of growth and safety

Option B: Do one more loop - Borrow another $1,500-2,000 - Buy more ETHST - Final position: ~8-8.5 ETHST - Health Factor: still above 2.0

Your Final Position¶

Conservative approach (2 loops):

Starting: 5 ETH, $0 debt
Final:    7.5 ETH, $7,500 debt
Growth:   +50% more ETHST
HF:       2.4 (very safe)

What you've achieved:

✅ 50% more ETHST exposure
✅ Maintained safe health factor
✅ Can withstand 30%+ ETHST price drop
✅ Amplified gains if ETHST goes up
✅ Still have room to borrow more if needed

Understanding the Math¶

Leverage Calculation¶

Your effective leverage:

Total ETHST value: 7.5 ETHST × $3,000 = $22,500
Your equity: $22,500 - $7,500 debt = $15,000
Leverage: $22,500 / $15,000 = 1.5x

What this means:

If ETHST goes up 10%, your equity goes up 15%
If ETHST goes down 10%, your equity goes down 15%
Moderate amplification, not extreme

Health Factor at Each Stage¶

Starting: - Collateral: $15,000 - Debt: $5,000 - HF = (15,000 × 0.80) / 5,000 = 2.4

After Loop 1: - Collateral: $19,950 - Debt: $7,500 - HF = (19,950 × 0.80) / 7,500 = 2.13

After Loop 2: - Collateral: $22,440 - Debt: $7,500 - HF = (22,440 × 0.80) / 7,500 = 2.39

Notice: HF stays above 2.0 throughout!

Risk Management¶

When to Stop Looping¶

Stop when:

✅ Health factor drops below 2.0
✅ You've reached your target ETHST amount
✅ You're uncomfortable with debt level
✅ Market conditions change

Don't:

❌ Loop until HF is 1.5 or lower
❌ Borrow maximum each time
❌ Ignore health factor warnings
❌ Loop more than 3-4 times

Price Drop Scenarios¶

Your position: 7.5 ETH, $7,500 debt, HF 2.39

If ETHST drops 15% to $2,550: - Collateral value: $19,125 - HF = (19,125 × 0.80) / 7,500 = 2.04 - Status: Still safe ✅

If ETHST drops 30% to $2,100: - Collateral value: $15,750 - HF = (15,750 × 0.80) / 7,500 = 1.68 - Status: Getting risky ⚠️ - Action: Add collateral or repay debt

If ETHST drops 50% to $1,500: - Collateral value: $11,250 - HF = (11,250 × 0.80) / 7,500 = 1.20 - Status: Dangerous ⚠️⚠️ - Action: Urgent - add collateral NOW

Liquidation at: - ETHST < $1,250 (58% drop from $3,000) - Very unlikely in short/medium term

Daily Monitoring¶

Check these daily:

Health Factor
Target: Keep above 2.0
Warning: Below 1.8
Danger: Below 1.5
ETH Price
Set alert at $2,550 (15% drop)
Set alert at $2,100 (30% drop)
Debt Growth
Interest accrues daily
~$1.03/day at 5% APR on $7,500

When to Exit¶

Taking Profits¶

If ETHST goes up 30% to $3,900:

Your position value: - 7.5 ETHST × $3,900 = $29,250 - Minus debt: $7,500 - Your equity: $21,750 - Profit: $6,750 (45% gain on $15k initial)

To exit:

Sell enough ETHST to repay debt
Need: $7,500 / $3,900 = 1.92 ETHST 2. Sell 2 ETHST for $7,800 USDST
Repay $7,500 debt
Withdraw remaining 5.5 ETHST 5. Final: 5.5 ETHST (up from 5) + $300 USDST

Emergency Exit¶

If ETHST is dropping fast:

Sell ETHST for USDST
Sell 2 ETHST for ~$6,000 (if ETHST at $3,000)
Repay partial debt
Repay $6,000 of $7,500
Remaining debt: $1,500
Improve health factor
New HF jumps to ~3.0+
Wait for market to stabilize

Comparison: With vs Without Looping¶

Scenario: ETHST goes from $3,000 to $3,600 (+20%)¶

Without looping: - Start: 5 ETHST = $15,000 - End: 5 ETHST = $18,000 - Profit: $3,000 (20%)

With conservative looping (2 rounds): - Start: 5 ETHST = $15,000 - End: 7.5 ETHST = $27,000 - Minus debt: $7,500 - Equity: $19,500 - Profit: $4,500 (30%) - 50% more profit!

Scenario: ETHST goes from $3,000 to $2,400 (-20%)¶

Without looping: - Start: 5 ETHST = $15,000 - End: 5 ETHST = $12,000 - Loss: $3,000 (-20%)

With conservative looping: - Start: 5 ETHST = $15,000 - End: 7.5 ETHST = $18,000 - Minus debt: $7,500 - Equity: $10,500 - Loss: $4,500 (-30%) - 50% more loss

Key insight: Leverage amplifies BOTH gains and losses proportionally.

Advanced: More Aggressive Looping¶

3-4 Loops (Higher Risk)¶

If you want more exposure:

Loop 3-4 times instead of 2
Final position: ~9-10 ETHST - Debt: ~$10,000-12,000
Health Factor: ~1.8-2.0
Leverage: ~2x

Trade-offs:

✅ More upside if ETHST goes up
❌ Less safety buffer
❌ Liquidation risk higher
❌ More interest costs

Only do this if:

You can monitor position constantly
You have funds to add collateral quickly
You're comfortable with higher risk
Market conditions are favorable

Tips for Success¶

DO ✅¶

Start with 2-3 loops maximum
Keep health factor above 2.0
Borrow 50-60% of max each time
Monitor position daily
Set price alerts
Have emergency funds ready

DON'T ❌¶

Loop until HF is 1.5 or lower
Borrow maximum each round
Ignore health factor warnings
Loop more than 4 times (beginners)
Forget about accruing interest
Panic sell at small drops

Cost-Benefit Analysis¶

Costs¶

Interest on $7,500 debt: - Rate: ~5% APR - Cost: $375/year - Daily: ~$1.03

Gas fees: - 6 transactions total - ~$0.60 total - Negligible

Swap fees: - 0.3% per swap - ~$22.50 total on $7,500 swapped - One-time cost

Total first-year cost: ~$398

Benefits¶

If ETHST goes up 20%: - Extra profit: $1,500 - Net after costs: $1,102 - Worth it!

If ETHST stays flat: - No price gain - Pay $398 in costs - Not worth it

Break-even: ETHST needs to go up ~5% to cover costs

Frequently Asked Questions¶

Can I loop with other assets?¶

Yes! This works with any collateral: - WBTCST (WBTCST) - Gold (GOLDST) - Silver (SILVST)

Same process, same safety principles.

Can I loop into different assets each time?¶

Absolutely! Each loop can buy a different asset:

Example multi-asset loop:

Round 1: Supply 5 ETHST → Borrow $5k → Buy 0.075 WBTCST
Round 2: Supply WBTCST → Borrow $2.5k → Buy 1.9 GOLDST
Round 3: Supply GOLDST → Borrow $1.5k → Buy 160 SILVST

Result: - Diversified collateral: ETHST + WBTCST + GOLDST + SILVST - Total debt: $9,000 - Health Factor: 2.1+ (safe)

Benefits: - ✅ Spread risk across multiple assets - ✅ Capture different price movements - ✅ Portfolio diversification - ✅ Same health factor management - ✅ Flexible strategy

Considerations: - More complex to track - Different LTV ratios per asset - Multiple price correlations - Rebalancing may be needed

How many times can I loop?¶

Safely: 2-3 times (HF > 2.0) Aggressively: 4-5 times (HF > 1.5) Maximum: Until HF approaches 1.0 (very risky)

What if I want to unwind one loop?¶

Easy! Just: 1. Sell some ETHST for USDST 2. Repay part of your debt 3. Your HF improves 4. Withdraw some collateral if desired

Can I loop with CDP instead of Lending?¶

Yes! Same concept: - Use CDPEngine instead of LendingPool - Mint USDST instead of borrow - Lower fees (2-3% vs 5%) - Different risk metrics (CR vs HF)

Next Steps¶

Ready to start?

Practice with small amounts first
Try with 0.5-1 ETHST - Do 1-2 loops
Get comfortable with the process
Scale up gradually
Once confident, use more capital
Add more loops carefully
Always monitor health factor
Learn more:
Borrow Guide - Detailed borrowing mechanics
Swap Guide - How to swap efficiently
Exit Strategy - How to unwind safely

Need Help?¶

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Docs: docs.strato.nexus