Leverage bTokens

Baseline allows you to borrow against your bTokens at 0% interest, using the protocol's floor value (BLV) as collateral. You can amplify token exposure, or leverage, by re-buying with borrowed funds.

How It Works

1. Borrow your bToken's BLV
2. Use the borrowed funds to buy more bTokens
3. Repeat N number of times to compound your position
4. Maximum leverage is limited by the token's premium, defined as the difference between the token's market price and the BLV.

Key Differences from Borrowing

• Borrowing gives you capital without selling.
• Leverage uses that capital to re-enter the market — amplifying gains (and risks) when price moves.
• Users who borrow receive funds in their wallet whereas users who leverage use all available borrowed funds to increase bToken exposure.

Risks to Consider

• Price Exposure: Larger positions mean bigger gains and losses when price moves
• Slippage and Gas Costs: Each buy-borrow loop incurs slippage and gas costs
• Market Timing: Poor timing (buying high, selling low) can amplify losses

How to Leverage

Step 1: Connect Your Wallet

1. Navigate to app.baseline.markets (opens in a new tab)
2. Click "Connect Wallet" in the top right
3. Choose your preferred wallet (e.g. MetaMask, Rabby, etc.)
4. Approve the connection

Step 2: Open your first position

1. Navigate to a token page, and click "Loop"
2. Select amount of reserve asset you want to spend
3. You'll see your position change:
   • Position Value: Total value of bToken minus debt
   • Collateral: Your bTokens used as collateral
   • Debt: Amount borrowed against your position
   • Leverage: Maximum leverage possible based on token premium
4. Click "Loop" to execute the transaction
5. Your position will be listed in the "My Loops" section of your portfolio

Close your Position

1. Go to "My Loops"
2. Select the position you want to close
3. Choose "Close Position" and confirm the transaction
4. Receive the reserves in your wallet