How to Leverage Your Crypto

Leveraging your crypto can be a great way to increase the amount of money that is working on your behalf. In this situation, you’ll take tokens you own, like Bitcoin, Ethereum, XRP, etc, and put them up as collateral that you can borrow against. This allows you to keep tokens that you plan on HODLing (what is hodl?) and get more tokens that you can use to earn a yield in the DeFi space.

You’ll need to be careful how much you borrow. Most leverage options will have a maximum amount that you can borrow. If the market starts to crash and you are fully leveraged, you will likely have your collateral liquidated. Basically, the app will take your tokens and sell them on the market to try and minimize their losses as much as possible. The market will always have swings so you’ll need to be on top of your borrow amount.

As an example, let’s say you put 1 BTC in while the price is $55,000. Venus allows you to borrow a maximum of 80% of the total value, so $44,000. If BTC drops $2,000 putting 1 BTC at $53,000, you’ll be over the 80% max threshold and they will liquidate up to 50% of your BTC to pay back the loan + a 10% fee of the amount they liquidated. In this situation, let’s say they liquidated 50% (the maximum they can liquidate). That means you’d have $22,000 of the loan paid off plus you’d lose an additional $2,200 as a fee for the liquidation.

Each app is going to be different, so you’ll need to research the app’s liquidation guide prior to putting any money in to ensure you don’t end up losing assets through liquidation.

Another caution, if you borrow in anything but a stablecoin (USDC, BUSD, USDT, DAI) you’ll risk having to pay back more if the value of the token you borrowed goes up. You could also owe less if it goes down. It’s up to you to decide how risky you want to be.

This is not financial advice. It is meant to be an explanation for how you can begin leveraging your crypto assets but does not replace your own research and understanding of risk.


  1. Open your app of choice, we’ll use TrustWallet.
  2. Navigate to the Browser
  3. Type in in the “search or enter website url”
  4. Scroll down until you see “Supply Market”
  5. Select the asset you’d like to use as collateral
  6. Click Enable
  7. Type in the amount you’d like to supply
  8. Click Supply
  9. Click Send
  10. You should now see the “Supply Market” area again
  11. Select the toggle next to the asset that’s labeled “Collateral”

Now that you’ve added collateral, we can borrow against it. During this process, you’ll also earn some interest on the collateral you used which will lower the total amount you’ll actually pay to borrow the token.

  1. Click Borrow Market tab
  2. Select the asset you’d like to borrow
  3. Type in the amount you’d like to borrow
  4. Click Borrow
  5. Click Send

Congrats! You’ve just borrowed an asset using your other crypto as collateral. You can now take this token and swap it for something else and use it to yield farm.

If you get to the point that you need to pay off the loan you’ll need to pay it back in the original token you borrowed. For example, if you borrowed USDC, you’ll need to have USDC to pay the loan back. Once you have the token you borrowed, you can pay it off.

  1. Click on the Borrow Market tab
  2. Click on the asset you borrowed
  3. Click Repay Borrow
  4. Type in the amount you’d like to repay
  5. Click Repay Borrow
  6. Click Send

One thing to keep in mind is that you will be accruing interest on the token you borrowed at the APR they’ve specified. This APR will typically be variable so you’ll need to keep track of that as well to ensure you don’t pay more for the borrowed coin than you are making in other areas.