gLooping GM Assets

How to Loop GM Assets

Manual Looping

Users can manually loop their GM assets (gmBTC, gmETH, and gmSOL) by taking the following steps:

1. Once you've deposited your collateral assets and borrowed USDC, head to GMX and buy more of the same GM token with the borrowed USDC. Come back to GM Lending to deposit the additional GM tokens into the pool, which increases your collateral value again, which allows for another USDC borrow, although at a smaller amount this time.

2. Repeat steps 2-4 until you are satisfied or you hit the maximum leverage amount (5x, assuming a 0.8 lending factor).

Note: Automated Looping is the repeated supplying and borrowing of tokens in a smart contract-assisted single transaction. We are unable to offer automated gLooping of GM assets at this time. (We are hopeful that this will change in the future.)

Liquidation Risk

Your looping position (or any positions involving active borrows) can be liquidated if your health factor falls below 1. This can occur if you have looped enough times to bring the borrow amount within a small percentage of the maximum borrowable amount, determined by your collaterals' lending factor(s). Depending on the demand for the protocol's assets, if the borrow interest rate is higher than the GM token supply yield for a sustained period of time, your debt can increase faster relative to the supply yield, which would take your position over the liquidation threshold. It is recommended to manage your position(s) with a healthy buffer, so that elevated interest rates or typical market crashes will not lead to liquidations.

If you are unaware of some of the additional risks like smart contract exploits, some can be found here.