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, tokenized T-bills, or GM tokens) already supported on ZonaLend.
Choose debt asset and set leverage. Users select the debt asset they want to borrow (e.g. USDC), input the starting collateral amount, choose their desired leverage (generally 2x-5x), set slippage, and click "Loop".
Flash loan debt. ZonaLoop uses a flash loan to borrow the full amount of debt that your target leveraged position would require.
Swap and supply collateral. The flash-loaned debt is automatically swapped into the collateral asset (using the optimal route, including GMX minting for GM tokens if needed) and supplied together with your initial collateral as one lump sum.
Borrow and repay. The newly increased borrowing power is used to borrow the debt asset again, which is then used to instantly repay the flash loan — completing the loop in a single atomic transaction.
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, conservative limits for GM tokens) 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, crypto, or GM tokens).