ZonaLoop Overview
ZonaLoop is Zona's one-click leveraging tool that builds directly on ZonaLend. It allows users to instantly amplify their yield or price exposure to assets by borrowing against collateral and automatically looping the borrowed funds back into more of the same asset. ZonaLoop is designed for users who want to boost yields or price exposure without manual multi-step processes, while maintaining the safety of overcollateralized positions.
How ZonaLoop Works
ZonaLoop automates the looping process to create leveraged positions on lending platforms:
Select collateral. Users select a collateral asset (e.g. wstETH, sUSDe, or tokenized T-bills) already supported on ZonaLend.
Set leverage. Users select their desired borrow amount and leverage (generally 2x-5x), and click "Loop".
Flash loan. ZonaLoop uses a flash loan to temporarily borrow the extra capital needed to reach your target position size, then deposits your collateral plus the flash loan as one lump sum.
Loop collateral. ZonaLoop then borrows against this larger collateral position to repay the flash loan instantly - completing the loop in a single transaction.
Monitor position. Users monitor their position's health factor in the dashboard and can adjust leverage or unwind anytime.
The entire process happens in one atomic transaction, minimizing gas costs and slippage. Users can adjust leverage or unwind positions anytime.
Key Insights
Leverage is capped per asset (e.g., 3x for LSTs, 2x for RWAs) to manage risk.
Borrow interest accrues on the stablecoin debt, offset by the amplified yield from the looped collateral.
Supports both "yield-maximizing" (boost returns on stable assets) and "directional" (increase price exposure on RWAs or crypto).