Drift introduces Amplify — an automated leveraging solution that increases your exposure to yield-generating assets through recursive borrowing.

Amplify makes it easier to access higher APY while maintaining control over your position. Amplify will roll out initially with JLP/USDC followed by SOL LSTs.

Since Amplify is built using Drift’s borrow/lend engine, you benefit from lower borrow rates and tighter market spreads, creating attractive yields.

With each loop, your notional exposure increases — amplifying your potential yield with a single click. Amplify removes manual looping and complex workflows to provide higher yields.

Key Benefits of Amplify

• One-click Amplify: Each loop increases your APY automatically in one click, without requiring any manual steps.
• Capital Efficiency: Drift’s capital-efficient system enables competitive borrow rates, providing higher APY for Amplify users.
• Higher Yields: Earn leveraged earnings on yield-bearing assets through recursive strategy, compared to simply holding the yield-bearing asset on its own.

How does Amplify work?

Your exposure is multiplied through a Collateral Asset (like JLP) by borrowing a Borrowing Asset, which is then swapped back into the Collateral Asset. Amplify does this automatically for you.

Amplify does this automatically for you:

1. Deposit a Collateral Asset to Drift’s Borrow/Lend (Isolated Pool) via Amplify.
2. Borrow a Borrowing Asset against it, based on your chosen leverage ratio.
3. Convert the Borrowing Asset back into the Collateral Asset to increase your notional exposure.
4. Calculate PnL and Account Health for you to monitor the existing position more effectively.

Example:

A user deposits 100 JLP to open a 3x Amplify position. This initial 100 JLP is deposited into Borrow/Lend (Isolated Pool). Amplify then borrows USDC against the JLP to purchase an additional 200 JLP. The result: this user holds a looped JLP position now worth 300 JLP while earning yield on the entire position.

How to Open an Amplify Position

(1) Select a Pair

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(2) Input Deposit Amount and Leverage Ratio

Enter your deposit amount and select your desired Amplify ratio. You may deposit either the Collateral or Borrowing Asset, Amplify will auto-swap it as needed.

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(3) Review Details

Preview your position using the Position Preview and Risk Preview sections.

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(4) Click Amplify

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For more details on how to manage your Amplify position, click here.

Risks and Considerations

Amplify makes leveraged yield strategies simple, but it’s important to understand the risks:

• Liquidation risk: Your position can be liquidated if its margin ratio falls too low.  For JLP Amplify, this can happen if JLP loses value. For SOL LST Amplify, liquidation may occur if borrow rates stay higher than LST yields for too long.
• Interest rate risk: Borrowing rates and asset yields can change. If borrowing costs outweigh your returns, you may lose money.
• Oracle risk: Amplify relies on external oracles to price assets. If an oracle fails or is manipulated, it could lead to incorrect liquidations or losses.
• Liquidity risk: If markets are illiquid, you might face slippage or delays when opening, closing, or getting liquidated.
• Smart contract risk: As with all DeFi products, smart contract bugs or exploits are possible. Amplify also interacts with third-party tokens like JLP or mSOL — assess their risks too.

Amplify Your Yield

Amplify is ideal for users already holding JLP or SOL LSTs and looking to earn more from their positions. By making leverage simple and automated, Amplify unlocks access to higher yields, without the complexity.

However, higher yield also means higher risk. Be sure to review your positions and understand the mechanics before committing funds.

Explore Amplify on Drift today here!