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Frequently Asked Questions

This comprehensive FAQ addresses common questions about Loopify Finance, our yield optimization strategies, and platform operations.

Platform Overview​

What is Loopify Finance?​

Loopify Finance is a sophisticated yield optimizer launching on Ethereum mainnet, specializing in USDe and sUSDe strategies. We provide users with Automated Yield Vaults: Conservative (5-10% APY) and Aggressive (20-35% APY) strategies

Our platform leverages advanced techniques like PT/YT looping, cross-protocol arbitrage, and leveraged yield farming to maximize returns while managing risk.

How does Loopify Finance work?​

Loopify Finance aggregates liquidity from users and deploys it across multiple DeFi protocols to optimize yields:

Conservative Strategy:

  • Diversified lending across Aave, Compound, Morpho
  • sUSDe staking for base rewards
  • Low-risk arbitrage opportunities

Aggressive Strategy:

  • 5x leveraged PT/YT looping through Pendle Finance
  • Concentrated sUSDe positions with leverage
  • Governance token farming and protocol incentives

What makes Loopify Finance different?​

Key Differentiators:

  • Ethereum Mainnet: Launching on Ethereum with future Converge Network transition
  • USDe Specialization: Deep expertise in Ethena ecosystem strategies
  • Yield Looping: Advanced PT/YT strategies for amplified returns
  • Advanced Looping: Sophisticated PT/YT strategies typically only available to institutions
  • Risk Management: Automated health factor monitoring and liquidation protection

Looping Mechanics​

How does yield looping work?​

Yield looping amplifies exposure to underlying yield-bearing assets through leverage. Here's a simplified example:

3x Leverage Loop on $100 USDe:

  1. Flashloan: Borrow $300 USDe temporarily
  2. Collateral: Deposit $400 total ($100 + $300) into Aave
  3. Borrow: Take $300 USDe loan against collateral
  4. Split: Use Pendle to split $300 USDe → $100 PT-USDe + $200 YT-USDe
  5. Collateral: Deposit PT-USDe as additional collateral
  6. Repay: Return $300 USDe flashloan
  7. Result: Own $200 YT-USDe (2x USDe yield exposure) on $100 initial capital

Yield Calculation:

  • YT-USDe earning 25% APY
  • $200 exposure × 25% = $50 annual yield
  • ROI: 50% APY on $100 initial investment

What are PT and YT tokens?​

Principal Tokens (PT) and Yield Tokens (YT) are created by splitting yield-bearing assets:

PT-USDe:

  • Represents the principal amount of USDe
  • Trades at a discount to face value
  • Redeemable for full USDe value at maturity
  • Used as collateral in Loopify Finance strategies

YT-USDe:

  • Represents all future yield from USDe
  • Price appreciates with underlying yield rates
  • Expires at maturity date
  • Primary value driver in leveraged strategies

Example: $100 USDe → $95 PT-USDe + $5 YT-USDe (prices vary by market conditions)

Why is leverage profitable?​

Leverage becomes profitable when the cost of borrowing is less than the yield and points earned on the leveraged position, with potential airdrops offsetting borrowing costs.

PT-USDe Looping Strategy Example

Real performance: $100k position, Aug 1 - Sept 24 (54 days)

Strategy Setup:

  • Mint $100k PT-USDe at 14.5% fixed APY
  • Borrow at 8% average cost to leverage position
  • Total leverage exposure across protocols

Costs & Returns:

  • Interest Costs: $1,184 paid over 54-day period
  • PT Intrinsic Value: $2,145 gained from fixed rate
  • Net PT Profit: $961 ($2,145 - $1,184 costs)

Airdrop Rewards:

  • Sats Points: 324M sats earned (60x multiplier × $100k × 54 days)
  • ENA Tokens: 4,050 ENA tokens received
  • ENA Value: $3,038 (4,050 × $0.75 per token)

Total Performance:

  • Combined Returns: $3,999 total ($961 PT + $3,038 ENA)
  • 54-Day Return: 4.00% in under two months
  • Annualized Rate: 27.03% APR

Return Breakdown:

  • 76% from airdrops: ENA tokens and sats points ($3,038)
  • 24% from PT carry: Fixed rate arbitrage ($961)
  • Risk Factor: Health factor monitoring prevents liquidation

What happens if I'm liquidated?​

Liquidation Triggers:

  • Health factor falls below 1.01
  • Automatic liquidation process begins
  • Smart contracts sell collateral to repay debt

Liquidation Process:

  1. Detection: Automated systems detect health factor < 1.01
  2. Execution: Liquidation bot triggers smart contract
  3. Sale: Collateral sold at market prices
  4. Repayment: Debt + interest repaid from sale proceeds
  5. Remainder: Any excess collateral returned to borrower
  6. Penalty: Variable liquidation bonus paid to liquidator based on protocol

Protection Measures:

  • Email/SMS alerts when health factor approaches danger levels
  • 48-hour notice before liquidation in non-emergency situations
  • Partial liquidations minimize collateral loss

Risks and Safety​

What are the main risks?​

Protocol Risks:

  • Smart Contract: Code vulnerabilities despite audits
  • Integration: Third-party protocol failures could impact strategies
  • Regulatory: Changing regulations may affect operations

How is my money protected?​

Security Measures:

  • Multi-signature: Critical functions require multiple approvals
  • Timelocks: 48-hour delay on major protocol changes
  • Audits: Professional security reviews by PeckShield (Q1 2026)
  • Risk Management: Automated position monitoring and liquidation protection

Risk Management:

  • Diversification: Funds spread across multiple protocols
  • Monitoring: Real-time health factor and risk tracking
  • Emergency: Circuit breakers can pause operations if needed
  • Transparency: All operations are on-chain and verifiable

Can I lose money?​

Yes, all investments carry risk of loss:

Leverage looping:

  • Higher risk due to leverage
  • Potential loss of funds which is variable based on protocols liquidation penalties.

Fees and Costs​

What fees does Loopify Finance charge?​

Looping Fees:

  • Standard users: 0.075% per execution
  • Pre-deposit users: 0.05% - 0.045% per execution (discount based on time weight of deposit)

Management Fees:

  • Looping is 0.075% on all loops, discounted rates up to 0.045% depending on length and amount of pre-deposit

Performance Fees:

  • 10% of all additional yields in the yield optimizer vaults

No Hidden Fees:

  • No deposit or withdrawal fees
  • No early vault exit penalties
  • Transaction costs (~$0.01-0.05) paid directly to network

Fee Justification:

  • Active management and optimization
  • Risk monitoring and protection
  • Research and development of new strategies

How do fees compare to alternatives?​

Loopify Finance vs Competitors:

  • Looping fees: 85% cheaper than DeFi Saver and other competitors (0.075% vs 0.5%)
  • Gas optimization: Advanced batching and flash loan techniques reduce costs
  • Net fees: ~0.8% total vs 2-3% typical for similar strategies

Technical Questions​

What blockchain is Loopify Finance built on?​

Ethereum Mainnet: Launching initially on Ethereum with future migration to Converge Network

Launch Strategy:

  • Phase 1: Ethereum mainnet deployment for maximum compatibility and liquidity
  • Phase 2: Migration to Converge Network when live for ultra-low gas costs
  • Benefits of eventual transition: $0.01-0.05 per transaction, 2-second confirmations, MEV protection
  • Ethereum compatibility: All tools, wallets, and contracts will work seamlessly

Is the code audited?​

Current Status:

  • Internal security reviews completed
  • Testnet stress testing ongoing
  • Bug bounty program planned for mainnet launch

Planned Audits:

  • PeckShield: Q1 2026 (6-8 week comprehensive review)
  • Trail of Bits: Q2 2026 (advanced cryptographic analysis)
  • Consensys Diligence: Q3 2026 (final pre-mainnet audit)
  • Others TBD

Bug Bounty: Up to $50,000 rewards for critical vulnerabilities (launches with mainnet)

Can I integrate Loopify Finance into my application?​

Integration Examples:

  • Yield optimization platforms
  • Risk management dashboards
  • Automated looping strategies

Getting Started​

How do I start using Loopify Finance?​

Step-by-Step Guide:

  1. Connect Wallet: Use MetaMask or compatible wallet
  2. Ensure Ethereum Network: Connect to Ethereum mainnet
  3. Get USDe: Buy on DEXs or centralized exchanges
  4. Choose Strategy: Loop with a pre-built strategy
  5. Deposit: Pre-deposit users can get discounts + possible future governance tokens

What's the minimum deposit?​

Vault Minimums:

  • Yield Optimizer Minimum fee if yield is lower than fee's: $10 USDe/0.02 wETH/0.001 wBTC

How do I withdraw my funds?​

Vault Withdrawals:

  1. Navigate to your vault position
  2. Click "Withdraw" and enter amount
  3. Check processing time (usually instant)
  4. Confirm transaction in MetaMask
  5. Receive funds in your wallet

Potential Delays:

  • High vault utilization may cause delays
  • Large withdrawals may be processed in batches
  • Emergency situations may temporarily pause withdrawals

Where can I get help?​

Community Support:

  • Discord: Real-time help from community
  • Twitter: Latest news and announcements
  • Email:Support@loopify.finnace
  • Support tickets for account-specific issues
  • Emergency contact for urgent situations goto our discord and open a support ticket

This FAQ is regularly updated based on community questions and platform developments. For the most current information, please check our documentation and official communications channels.