How it works
An overview of how leveraged vault strategies loop, rebalance, and unwind positions.
Leveraged Vaults automatically use leverage to amplify exposure to an asset and pursue higher yield.
They manage looping, rebalancing, and unwinding for you.
Quick Overview
At a high level, the vault:
Supplies the deposited asset as collateral
Borrows against that collateral
Swaps borrowed funds back into the base asset
Repeats the process up to safe leverage limits
This increases exposure relative to your initial deposit. As the vault’s total assets grow, the value of your vault shares increases.
Depositing
You can deposit in two ways:
Direct Deposit
Deposit the vault’s base asset (e.g. XTZ or BTC)
Receive vault shares immediately
Deposit With Another Token
Deposit a supported token
The vault swaps it into the base asset automatically before depositing
Before confirming, you will see:
The number of shares you’ll receive
Your estimated position value
Swap details and slippage settings (if applicable)
Withdrawing
You can withdraw at any time using one of two methods:
Instant Withdrawal
Available if the requested amount is within the vault’s base asset reserves
Shares are redeemed immediately
Scheduled Withdrawal
Used when funds are actively looped
The vault automatically unwinds positions to release liquidity
Processed within ~10 minutes once conditions match your slippage settings
Tokens can then be claimed
Additional notes:
You can cancel a scheduled withdrawal before it completes
Partial withdrawals are supported
Only one active or unclaimed scheduled withdrawal is allowed at a time
Instant withdrawals remain possible if sufficient liquidity is available
Vault Shares & Exchange Rate
Your position is represented by vault shares.
The exchange rate between shares and the base asset may fluctuate slightly due to:
Flashloan repayments
Swap buffers and slippage
Timing of rebalancing cycles
A callback mechanism ensures any leftover tokens are quickly reinvested, keeping fluctuations small and short-lived.
Last updated