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Usecases

Untangled Loop is the ultimate looping layer for DeFi missions on Stellar. All positions are built by automating a looping strategy using spot + money markets.

1) Go long or short like a perp (directional)​

Trading XLM/USDC via long/short positions is economically similar to perps:

  • Long Base: collateral in Base, debt in Quote
  • Short Base: collateral in Quote, debt in Base

Perks of Loop-style positions

  • Liquidity comes from both spot + money market depth
  • Carry is derived from money-market rates (transparent)
  • No order book dependency; execution is a swap + borrow/supply batch

2) Rate views / carry strategies​

Because positions have two legs (supply + borrow), you can:

  • target environments where collateral supply yield is high relative to borrow cost
  • manage exposure while optimising net carry (subject to price and liquidation risk)

3) Stable pairs / low-vol exposure (where supported)​

If two assets are closely pegged (or highly correlated), looping can be used to express a mostly carry-driven position.

Whether a specific stable/correlated pair is available depends on money market collateral rules and available spot routes.

4) Arbitrage & venue comparison​

Because pricing is sourced from spot routes and money market oracles/utilisation:

  • traders can compare implied prices/carry to other venues
  • sophisticated users can look for temporary dislocations (with caution)