# I'm leverage looping

## <img src="https://3594873091-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FCUsr6ssg69scPnMJR3tw%2Fuploads%2Fnf5VQAFGSs2gycM9QSvv%2FFrame%20427321120.png?alt=media&#x26;token=2e729ac9-3b54-4827-b5a0-40aeb830e7e6" alt="" data-size="line"> <mark style="color:$info;">I use</mark> Morpho <mark style="color:$info;">to</mark> leverage loop

{% hint style="info" %}
Let's take a scenario where you **supply weETH** on a Morpho market, **borrow ETH** against it, swap the ETH for more weETH, and repeat, **amplifying your restaking yield**. The same logic applies to any correlated-asset loop on Morpho (wstETH/ETH, USDe/USDC, PT-sUSDe/USDC, etc.).
{% endhint %}

### What you need to monitor

Leverage looping amplifies both your **gains and losses**. Your main risks are **getting liquidated**, the **spread between your yield and borrowing cost** turning negative, and **security incidents** affecting the underlying protocols your loop depends on.

### What Otomato watches for you

Otomato **automatically detects and monitors** your Morpho looped positions and **alerts** you only when something **relevant** happens:

<details>

<summary>Bad debt / security incidents</summary>

Because leverage loops often **depends on multiple protocols**, a security issue anywhere in the chain puts your position at ris&#x6B;**.**

Otomato **surfaces security incidents** as soon as credible signals appear, covering not just Morpho itself, but also **underlying protocols and assets** your loop depends on.

* *"A vulnerability has been detected on Morpho.* [*View source.*](https://t.co/xxx)*"*
* *"A critical vulnerability has been reported on EtherFi.* [*View source*](https://t.co/xxx)*."*

</details>

<details>

<summary>Depegs</summary>

If your looped asset depegs from its correlated pair, your collateral value drops while your debt stays the same, pushing you closer to liquidation.

Otomato **continuously monitors** the price ratio between your collateral and debt assets, and alerts you as soon as a meaningful **deviation is** detected.

**Example notifications**

* *"weETH is trading at 0.991 ETH."*

</details>

<details>

<summary>Liquidation risk</summary>

Leverage looping means **tight health factors**. Otomato **monitors them** very closely and alerts you as soon as you approach dangerous levels.

**Example notifications**

* *"Your health factor on the weETH/ETH Morpho market is below 1.03. Pay attention!"*

</details>

<details>

<summary>Net yield change</summary>

On correlated-asset loops (e.g weETH/ETH), what matters most is **the spread between what you earn and what you pay**. If your borrowing rate exceeds your yield for a sustained period, your position is losing money.

Otomato **tracks your net yield** and alerts you when your loop turns unprofitable, so you can decide whether to keep the position open or unwind it.

**Example notifications**

* *"Your net yield on the weETH/ETH Morpho market has been negative for 3 days."*

</details>

<details>

<summary>Borrowing rate increase</summary>

On non-correlated markets (like borrowing USDC against ETH), a **borrowing rate spike** directly increases your cost and can quickly erode your loop's profitability.

Otomato **tracks borrowing rates** on your Morpho markets and alerts you when rates rise to levels worth reassessing.

**Example notifications**

* *"USDC borrowing rate on your ETH/USDC Morpho market is sitting at 11.5%."*

</details>

<details>

<summary>Asset &#x26; protocol news</summary>

Otomato **understands the full dependency chain** of your loop. For example, if you're looping weETH/ETH, you'll receive relevant news about **EtherFi**, **weETH**, and **Morpho.**

**Example notifications**

* *"EtherFi announced a new incentive program for weETH holders.* [*View source.*](https://t.co/xxx)*"*

</details>

### Improvements

We're continuously looking to add support for alerts the community is asking for. If you'd like us to add a new use case, reach out on [telegram](https://t.me/OxClement).