# Introducing Loops

By [YES collective](https://paragraph.com/@yes-collective) · 2024-09-08

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Introducing Loops - a new Baseline mechanic that allows users to increase their exposure to bTokens, effortlessly.

![](https://storage.googleapis.com/papyrus_images/41ee7b4a8d9bc430c9a977f97b5542cf653193f83464ed394267e4d9ec2c8a2c.png)

What is it
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Looping involves repeatedly borrowing against bToken to purchase more bTokens, creating a leveraged position. When the bToken's price rises relative to the reserve asset, looped positions see amplified returns:

![](https://storage.googleapis.com/papyrus_images/35b6c01b43a8e342c31b3a12657d49774e7c91ec906e5fba566a100793434c69.png)

Unlike [Baseline Loans](https://docs.baseline.markets/utility/loans), where users have to pay interest based on the amount borrowed, Loops use a funding rate mechanism to charge fees on looped positions. In this system, the protocol automatically "shrinks" both collateral and debt over time, allowing users to maintain non-liquidatable leveraged exposure without any active management of the position.

**How do I loop?**
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Baseline Loops simplifies the looping process through a simple user experience:

1.  Deposit reserves (ETH, USDB, etc) to Open and/or Increase Position.
    
2.  The system automatically max loops for you.
    
3.  Decrease and/or Close Position to un-loop collateral and return reserves.
    

This streamlined process unlocks benefits of a leveraged position while reducing complexity to a minimum. To learn more about Loops: [https://docs.baseline.markets/utility/loops](https://docs.baseline.markets/utility/loops)

**When do I loop?**
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Looping tends to be most advantageous when:

1.  The bToken's price is close to its BLV, offering maximum capital efficiency and lower downside risk.
    
2.  You have a strong conviction in the bToken's short to medium-term price appreciation.
    
3.  You understand the risks involved and have a clear exit strategy.
    

Remember, while looping near the BLV offers better capital efficiency, it should still be approached with caution and a thorough understanding of the potential outcomes.

**Next Steps**
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Loops is now available for YES and (soon) MACHI. Head over to Baseline Markets to try it out:

[https://app.baseline.markets/](https://app.baseline.markets/)

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*Originally published on [YES collective](https://paragraph.com/@yes-collective/introducing-loops)*