Loops are structured products that enable one-click, leveraged exposure to yield-bearing assets such as JLP, liquid-staked SOL, fixed-yield tokens, and other tokenized yield primitives. By looping, users borrow more of the same asset they deposit, creating a compounding position where both the initial and borrowed tokens earn yield. Loopscale uses fixed-rate loans to power Loops, helping to mitigate rate volatility that can otherwise erode leveraged returns. Loop positions can be:
  • Market-neutral: stablecoin or staked-asset loops
  • Directional: including long or short-biased positions on volatile assets
Learn more about the mechanics behind Loops here. If you’re looking for help with your Loop, a good place to start is FAQ and Common Issues.

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Open, Manage, Roll Over, and Close Loops

  1. Visit the Loops page in the Loopscale App.
  2. Choose a Loop. See Loop Types for more detail.
  3. Review whether the position is market-neutral or price-sensitive.
  4. Select your leverage. Higher leverage increases both yield and liquidation risk.
  5. Choose optional settings: Slippage tolerance and fixed-rate duration (longer durations reduce rate risk, but may have higher rates and/or less liquidity).
  6. Confirm and execute the transaction.

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Risk Management

Loops introduce amplified exposure. While they are designed to boost returns from yield-bearing assets, they also come with meaningful risks:
  • Asset price volatility: Directional Loops (e.g. long or short) can be liquidated if the underlying asset moves against the position.
  • Yield vs. borrow rate mismatch: If your asset’s yield drops below your fixed borrow rate, the strategy may become unprofitable.
  • Liquidity constraints: AMM liquidity must be sufficient to open or close Loop positions. If unavailable, users may face slippage, need to wait, or close manually.
Loopscale mitigates rate volatility using fixed-rate loans, but users should still monitor Loop health and understand the risks involved. See additional considerations on the Risk Management page.

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Understanding Returns

Loop P&L depends on:
  • The yield rate of the asset being looped
  • The borrow rate and fixed duration
  • The chosen leverage multiplier
  • Any associated fees (origination, slippage, early close before maturity for PTs)
A Loop is profitable when the compounded yield on the looped tokens exceeds the borrow costs and any third-party fees to open or close the position (such as swap fees). Yield is typically more likely for assets with high or stable base yields. To learn more about pricing for particular tokens, see Pricing & Custom Oracles

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Loop Types

Different Loops have distinct risk profiles and performance dynamics based on the yield asset and debt asset.
Loops on tokens like mSOL, JupSOL, or restaking tokens earn a spread between staking yield and borrow rate.
  • Yield Source: Staking rewards
  • Liquidation Risk: Not based on price volatility — driven by staking yield falling below borrow cost or validator underperformance
  • Best Use: Capital-efficient compounding of stable staking yields

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FAQ & Common Issues

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’Market does not have enough SOL supplied’ when opening a loop

Loops rely on swaps via AMMs (like Orca or Raydium). This error means there isn’t enough liquidity in the AMM pool to complete the Loop at your selected size. Try reducing leverage or selecting a different Loop.

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‘No Route Found’ when closing a Loop

This indicates insufficient liquidity in the AMM to close the Loop. You can wait for AMM liquidity to recover or manually close your Loop.

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Unexpected negative PnL, particularly after opening a position

Loops can show negative yield if market conditions move against the position, such as changes in asset values, high borrow rates, or insufficient collateral yield. PnL can also start negative due to costs associated with opening a Loop, particularly at higher leverages. For leveraged PT and LST Loops, negative PnL is often temporary, especially immediately after opening a Loop. This usually reflects execution costs and conservative estimates rather than poor performance. For LSTs, negative PnL often resolves when staking rewards are distributed. For PT loops, true value becomes apparent at maturity or as market liquidity improves. For a better estimation of PnL, you can simulate pricing by clicking Close Loop to simulate closing the position in your wallet, without confirming the transaction. This will show a more accurate estimation as it is a simulated transaction rather than an estimation. What can affect your PnL:

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Market Hours

For certain assets, Loops can only be closed or fully repaid during market hours. Open market hours are as follows for these assets:
AssetMarket Hours (EST)Description
xStocksWeekdays 9:30am–4:00pmxStocks are tokenized equities such as NVDAx or CRCLx. They are available during U.S. market hours.
Flash Pool 2 (FLP.2)Sunday 5pm - Friday 5pm, with a daily hour break at 5pmFlash Pool 2 provides liquidity for synthetic tradeable assets across oil, FX, and metals. This market is available during CME FX/Metals/Oil market hours.