You’ve been doomscrolling CT all week. Everyone else is printing with ETH staking loops, and you’ve got $10k sitting idle. The FOMO is nauseating. You bridge to Base, open up AAVE, swap ETH to wstETH, borrowing against it, resupplying the borrowed ETH, borrow again, looping it by hand. You do it five times. The time and attention is exhausting. You’re spreadsheeting your LTV, double-checking your math, triple-checking the oracle feeds. This was supposed to be passive yield, there has to be a better way...

The Hidden Costs of Traditional Leverage

Manual looping or going long can amplify your gains if you’re willing to invest serious time, energy, and attention. Not to mention the know-how required to use it properly. As any experienced looper knows, constantly monitoring positions, maintaining collateral ratios, and avoiding liquidations can become a full-time job.

DeFi has made it possible for anyone to manually loop collateral to maximize yields or manage leveraged positions across protocols, but these strategies incur a massive emotional and cognitive load. Manual leverage isn’t just tedious, it’s error-prone, expensive, and stressful. What if you could access the same powerful strategies with a few clicks, without the sweat? Enter Leverage Tokens (LTs).

What Are Leverage Tokens?

Leverage Tokens are ERC20 tokens designed to simplify leveraged trading in DeFi. They automate critical processes like borrowing, swapping, and rebalancing, providing users with seamless exposure to leveraged positions without the need for constant manual adjustments. By incorporating automated rebalancing, LTs significantly reduce the risk of liquidation, offering a user-friendly way to engage with leverage.

LTs are a streamlined solution that simplifies leverage trading with complete transparency, making it easier to capitalize on opportunities you have conviction in and verify how your position will behave without surprises. Oh, and Leverage Tokens are composable, so they work wherever ERC-20s work. Here’s the benefits they offer in a nutshell:

• Dead-Simple Leverage: LTs eliminate the need for manual looping, managing complex positions, or juggling multiple tabs. Forget gas fees, margin management, or loan-to-value (LTV) ratios. LTs make leverage so accessible beginners and experienced traders can harness its power.

• Transparent, Predictable Design: LTs operate with clear, on-chain, fully auditable, and verifiable behavior. There are no hidden mechanics, every aspect is transparent, ensuring you always know what you’re getting into.

• DeFi Leverage Legos: LTs are composable and integrate seamlessly with other DeFi protocols. That means any platform, project or community that incorporates ERC20s can also create their own custom LT strategies, making them flexible and open-ended, the only limit to your one-click strategies is your imagination.

Traditional DeFi Leverage vs. Leverage Tokens

Leverage Tokens aren’t the only way to amplify returns in DeFi. But compared to ‘old school’ DeFi leverage strategies, they are faster, simpler, and far easier to manage. Here’s a quick run down of some of the popular incumbents and how Leverage Tokens stack up:

Perpetual Futures

Perp DEXs like GMX or dYdX let you customize leverage for long and short positions. But you must actively monitor funding rates, liquidation prices, and margin requirements. You need to MANUALLY navigate complex UI layers with advanced options like isolated margin, cross-margin risk, position size caps, slippage tolerance settings, and oracle-based price feeds. One misstep and your position is liquidated or drained by funding rate imbalances.

Leverage Tokens keeps things simple via an easy to understand FE/UI and allows you to maintain your normal DeFi habits. No need to master complicated concepts, like funding rates to manage, no advanced margin mechanics to learn, and no liquidation stress.

Manual Looping

Lending/borrowing platforms like Aave or Compound unlock manual looping strategies by letting you deposit collateral, borrow stablecoins or bluechips, re-supply, and repeat. This exposes you to interest rate fluctuations, collateral change in price, health factor volatility, and liquidation cascades. You are again responsible for optimizing LTV ratios, tracking protocol-specific risk thresholds, and ensuring timely repayments.

Leverage Tokens compress all of this into a single transaction. No manual loops, no interest accrual tracking, and no liquidation micromanagement.

DeFi Tooling for Leverage

Using tools like DeFi Saver, Summer.fi Pro or Contango, you can borrow capital to leverage your positions. But this tooling requires a deep understanding of the FE/UI of that platform, including the customizable features, (hidden) fees, and a of what you are trying to accomplish (i.e. some protocol knowledge and technical competence).

You need to monitor your position, rebalance manually, and react to market volatility to avoid losses. And though these positions are customizable, this means trading off composability or fungibility. These positions are not ERC-20 standard, so they can never be ported to other DeFi protocols.

Leverage Tokens are clean, composable, and built for scale. One click gives you instant, amplified exposure without the complexity. Leverage Tokens are ERC-20 tokens, meaning they are immediately compatible with your favorite DeFi protocols from Pendle to Uniswap. Leverage Tokens have the same level of composability as other common DeFi assets, something you’ve come to expect and demand. That means more future utility, use cases and capital efficiency. Simple, powerful, and built for DeFi users. So your next question is…

What Can I Do With Leverage Tokens?

Leverage Tokens simplify complex DeFi strategies into a single asset you can buy, hold, and trade. Instead of manually managing loops, collateral ratios, or liquidations, LTs give you exposure to leverage with just one click. Here’s a few examples of the DeFi strategies LTs open up:

Leverage Looping

Use Leverage Tokens to amplify your position by looping correlated assets like WeETH/ETH or wstETH/ETH. Instead of manually looping between staking and borrowing, Leverage Tokens condense the strategy into one click. You get boosted yield or points without having to manage liquidations or debt.

Longing / Shorting Bluechips

Bullish or bearish on BTC, ETH, or SOL? Leverage Tokens let you go 1.5x to 10x long or short on major assets with liquidity on Base. No need to track funding rates or worry about liquidation. Just simplified exposure to market moves.

Leveraged LP Farming

Increase your LP size on DEX pairs like ETH/USDC using Leverage Tokens. Earn more rewards and trading fees through your amplified position.

In a DeFi Portfolio

Integrating leverage tokens into your DeFi portfolio is easy and can support portfolio performance when used strategically:

• Long-Term Exposure: Use LTs for passive strategies in predictable markets, such as decisive uptrends or downtrends. Or delta-neutral/market-neutral strategies like leveraged looping.

• Short to Mid-Term Plays: Deploy LTs to capitalize on temporary market movements.

Leverage Tokens offer a powerful, user-friendly solution for high-conviction DeFi traders and loopers looking for amplified exposure without the grind of manual leverage management. Compared to perpetual futures, monolithic lending platforms, and existing DeFi tooling, LTs offer easy, automated one-click access to the same strategies that have required toil and headaches up until now.

Advanced DeFi Leverage, Simplified

Like all leverage, LT’s potential for magnified gains is matched by the potential for losses. So using leverage responsibly, as a strategic part of a diversified portfolio is always a good idea. As DeFi continues to evolve, Leverage Tokens will unlock a world of innovative strategies, equipping you with the simplicity, transparency, and flexibility to confidently seize opportunities and achieve your financial goals through responsible and strategic use.