Recently, @protocol_fx updated the data for its USDC circling strategy, and two figures stand out: fxSAVE’s yield is 6.5%, the USDC borrowing rate is approximately 2.8%, and the project claims the strategy’s targeted annualized return is close to 40%. What’s the logic behind this strategy? It’s actually quite straightforward. Suppose you hold a certain amount of USDC: you can first deposit it into fxSAVE to earn yield. Then, using assets tied to fxSAVE as collateral, borrow USDC on @Morpho, and reinvest the borrowed funds back into fxSAVE. Repeating this process creates a lending loop. The core idea is to use borrowed capital to expand the scale of yield-generating assets, aiming for the yield to cover borrowing costs while generating additional returns. @protocol_fx has also introduced two different ways to implement this strategy: 🔹 Use @9Summits’ 9Swap to automate the looping process, reducing manual repetition. 🔹 Explore a more hands-off approach via @LagoonFinance’s vault solution. The project also notes that over $12 million in USDC is available for borrowing on Morpho, providing meaningful liquidity context for this strategy. What’s noteworthy here isn’t just the 40% APR figure—it’s that f(x) is connecting yield-generating assets, lending markets, and strategy execution tools, giving users more options for on-chain capital management. That said, this looping strategy is not risk-free arbitrage. Both the 6.5% deposit yield and the 2.8% borrowing rate are subject to change. Looping also amplifies your exposure and introduces risks such as liquidation, transaction fees, and smart contract vulnerabilities. The near-40% annualized return is a projected figure provided by the project and does not represent guaranteed or fixed returns. When analyzing DeFi yields, don’t just focus on APR—consider where the yield comes from, how borrowing costs may fluctuate, and what your maximum potential loss could be in worst-case scenarios. This is precisely why I believe @protocol_fx deserves ongoing attention: it not only offers the fxSAVE yield product but is also integrating its ecosystem to help users of all experience levels understand and engage with on-chain yield strategies.