Auto-looping & Auto-leverage
How Auto-Looping Works
At its core, auto-looping is a recursive strategy that increases exposure to a yield-bearing asset using borrowed funds:
User deposits a base asset (e.g. USDC or an LP token) into a looping-enabled vault
The system automatically borrows against the deposited position using Aurelia's integrated lending layer or the lending layer of the partner project.
The borrowed funds are re-deposited to compound exposure and borrow power
This process repeats recursively until a predefined health ratio or risk threshold is met
The result is a leveraged yield farming position where users retain exposure to the underlying strategy, but with boosted capital efficiency and rewards.
Benefits of Auto-Leverage
Higher Yield Potential By looping deposits, users gain amplified exposure to yield-generating assets, resulting in higher APYs.
Hands-Off Management Aurelia handles rebalancing, borrowing, and deleveraging automatically no active strategy maintenance required.
Composable Leverage Auto-leveraged positions are ERC-4626 vault tokens, meaning they can be used elsewhere in the Aurelia ecosystem or beyond (e.g., as collateral, in LPs, or for swaps).
Risk Mitigated With conservative LTV thresholds and automated controls, leverage is designed to be safe by default, even during volatile conditions.
Safety-First Automation
Leverage without protection is reckless. That’s why Aurelia continuously monitors risk and health factors across all auto-looped positions.
Real-Time Health Monitoring: The protocol tracks the Loan-to-Value (LTV) and Health Ratio in real-time using decentralized oracles.
Dynamic Leverage Limits: Looping depth is capped by vault-level risk parameters, which can be dynamically adjusted by governance or strategy managers.
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