> For the complete documentation index, see [llms.txt](https://docs.term.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.term.finance/terminal-1-execution/workflows/looping.md).

# Looping

Looping creates leveraged exposure by using borrowed assets to increase a position, similar to buying on margin or putting on a carry trade. In DeFi, this is commonly done by borrowing against collateral, converting the borrowed asset into more collateral, and redepositing it to support additional borrowing. Terminal 1 packages that workflow into a single routed execution flow, so users can achieve the same economic result without manually executing each step.

Terminal 1 uses a solver to construct an optimal looping route given your inputs, available venues, and constraints. The solver searches supported transforms (including swaps and vault withdrawals where applicable) to maximize net token outcomes and minimize unnecessary slippage, subject to safety checks.

<figure><img src="/files/fvvIG7sHAeXFl6fMZ6WI" alt=""><figcaption></figcaption></figure>

### Common looping strategies

* **Leveraged exposure:** increase exposure to an asset while posting collateral in a different (uncorrelated) asset.
* **Carry trades (correlated assets):** construct exposure designed to capture a spread between correlated assets (e.g., borrowing vs lending/yield differentials), subject to funding, liquidation, and basis risks.

### When to use looping

* You want to increase exposure between uncorrelated assets without manually repeating borrow/swap steps.
* You want to construct a carry trade between correlated assets (capture a spread) with a single execution flow.

### What the route does (high level)

A looping route generally:

* takes flash liquidity to fund intermediate steps,
* borrows against collateral under the market’s parameters,
* swaps proceeds as required by the loop structure,
* establishes the final target exposure,
* repays the flash loan within the same execution flow,
* enforces route constraints so execution either completes fully or reverts.

### What to review before signing

* The selected market and resulting collateralization / leverage implications.
* The route path (venues and swaps included).
* Flash loan leg (source asset and implied premium).
* Fees, slippage exposure, and any UI buffers applied.
* Authorization scope (approvals/permits/spending caps required by the route).

### Common failure cases

* Insufficient available liquidity or borrowing capacity to complete the loop.
* Swap execution worse than expected and flash repayment cannot be satisfied.
* Required approvals/permits are missing or insufficient.

### Notes

Looping is an execution workflow. It does not change underlying protocol risk parameters. Users remain responsible for monitoring collateralization and liquidation risk under the rules of the venue(s) used.