Looping Strategies

What is Looping Yield Layer?

The Looper strategy allows sophisticated investors to amplify their yield exposure by providing first-loss capital to access high leverage. Loopers automatically borrow from SLF against their CCR collateral to buy more of the same RWA asset, creating leveraged positions that multiply returns while serving as the Junior Tranche protecting SLF providers.

How You Make Money from Looping

The Profit Mechanism With quality RWAs earning 10-20% APY and borrowing costs of 5-10%, looping amplifies your exposure to capture the yield spread at scale.

Example with 4x Leverage:

• Initial deposit: $250,000 in CCR (cleared RWA collateral) earning 20% APY

• Borrowed from SLF (75% LTV): $750,000

• Total exposure: $1,000,000 (4x leveraged position)

• Gross earnings: $1,000,000 × 20% = $200,000/year

• Borrowing cost: $750,000 × 10% = $75,000/year

• Net profit: $125,000/year vs $50,000/year without leverage

• ROI: 50% on your $250,000 equity (2.5x the base 20% yield)

_{Additional Yield Management}

• Sell Yield Rights to YT(Yield Tranche) buyers: Loopers can tokenize and sell their yield exposure to YT buyers, effectively implementing a covered call strategy to lock in profits and hedge risk

• Secondary Market Exit: Tokenize your entire looping position for instant liquidity without waiting through unstaking periods

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Risk Considerations

• Liquidation risk: If CCR collateral value drops significantly or net LTV exceeds liquidation LTV, position may be liquidated. As the Junior Tranche, Loopers absorb initial losses before affecting SLF providers.

• Interest rate risk: Borrowing costs from SLF may increase based on utilization, reducing net returns

• Market risk: Amplified exposure means amplified downside in adverse RWA performance

Bondify's Looper Yield Layer actively monitors positions and provides auto-deleveraging tools to mitigate these risks through dynamic position management.

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How Looping Works

Step 1: Position Setup

You deposit RWA assets into CBR, which undergo risk clearing to receive CCR. The system creates an isolated Looper vault instance for your position. Your CCR collateral is safely segregated with transparent tracking.

Step 2: Zero-Slippage Leverage Creation

System uses your CCR as collateral to borrow from SLF, receiving stablecoins at oracle prices. All leverage is provided by the Standing Lending Facility (SLF), which supplies USDC liquidity to Loopers as part of its Senior Tranche lending strategy.

Step 3: Reinvestment Loop

Borrowed USDC is used to buy or stake more of your target RWA asset, which is then cleared into additional CCR, increasing your total collateral exposure and leverage.

Step 4: Ongoing Management

System monitors position health and allows flexible management:

• Reduce leverage by repaying SLF debt

• Sell yield rights to YT buyers (hedge strategy)

• Tokenize entire position for secondary market trading

• Claim accumulated rewards and points

Step 5: One-Click Exit Management

While users can still repay debt with available assets and withdraw collateral normally, Bondify also offers delegated unstaking where you select your desired exit percentage (partial or 100%). The Looper Yield Layer handles the unstaking process, uses proceeds to repay outstanding SLF debt, and distributes remaining profits plus accumulated points to you.

Benefits:

• Avoid typical T+x days redemption periods multiplied by leverage (e.g., 5x leverage of 7-day-waiting = 35 days to fully unwind)

• No burden of extra unstaking costs (e.g., 1% instant redemption × 5x = 5% total cost)

• Delegate the unstaking job to save time and reduce operational complexity

• Secondary market alternative: Sell tokenized position instantly for immediate liquidity