Loop & liquidation
See your net APY and liquidation price before you loop or borrow.
Net APY = collateral yield × leverage − borrow rate × (leverage − 1). Simplified: ignores fees, compounding and rate changes. For correlated pairs, "price drop" means the collateral losing value against the debt (a depeg).
How looping works
You deposit an asset, borrow against it, buy more of the same asset and deposit that too. Repeat, and your exposure becomes a multiple of your deposit. Kamino Multiply and Jupiter Lend do this in one click. You earn the collateral yield on the whole position but pay borrow interest on the debt, so the strategy only works while the yield stays above the borrow rate.
On correlated pairs like JitoSOL against SOL, liquidation comes from a depeg or from borrow rates spiking above staking yield for long enough to eat your margin. On volatile pairs, a normal price move can liquidate you. Read Leverage and looping and the SOL loop playbook first.
