#testdappOSV3 Today let's talk about a DeFi tool—loop lending. I will explain in simple terms how to optimize assets and increase returns using loop lending on the Benqi platform while controlling risks. What is loop lending? Loop lending is using your collateral to borrow assets, then using the borrowed assets as collateral to borrow more, repeating this process several times to double the asset utilization and returns. Essentially, it is a way to leverage, but compared to directly using contracts for leverage, the risks are more controllable, and it can generally yield positive "funding rates." Taking Benqi as an example Benqi is a lending platform based on the Avalanche network, with simple operations and low fees, supporting ETH, AVAX, and sAVAX (staked AVAX), making it very suitable for loop lending. How to play loop lending? Basic steps Assuming you have X ETH and want to amplify your returns through loop lending while keeping borrowing safe. The steps are as follows: 1. Initial collateral and borrowing Deposit X ETH into Benqi as collateral. Borrow some AVAX (for example, 60% of the borrowing limit). 2. Staking and re-collateralizing Stake the borrowed AVAX into sAVAX to earn staking rewards. Deposit sAVAX into Benqi as new collateral. 3. Loop borrowing Borrow more AVAX, stake it into sAVAX, and continue depositing. Repeat this process until the borrowing risk approaches what you consider a safe line (for example, when the health factor drops to around 2.0), then stop.