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## Flash Leverage: Opening a Position Here, we’ll show you how to create an increased leverage position by looping. We loop through the process of depositing collateral, borrowing some stable coin and then buying more collateral. Then, we repeat the process over and over again. If we were to do that with smart contracts, then it would use up a lot of gas. Instead, we can create the same result using a flash loan, in which case we don’t have to loop through the three steps, saving us some gas. To open a leverage position: 1. Start with some initial amount of collateral. 2. Flash loan USD stablecoin. 3. Using that stablecoin that we just flash loaned, we will buy more collateral. 4. Then, deposit the collateral, which is the collateral that we had from step 0 and the collateral that we just bought, to Aave as collateral. 5. Once the collateral is deposited, we can borrow stable coins from the Aave protocol. 6. The stable coin that we just borrowed will be used to repay the flash loan from step 1. That’s how we create a large leverage position without looping through the process of depositing collateral, borrowing stable coin, swapping the stablecoin for collateral and then re-depositing it as collateral.
Here, we’ll show you how to create an increased leverage position by looping.
We loop through the process of depositing collateral, borrowing some stable coin and then buying more collateral.
Then, we repeat the process over and over again. If we were to do that with smart contracts, then it would use up a lot of gas. Instead, we can create the same result using a flash loan, in which case we don’t have to loop through the three steps, saving us some gas.
To open a leverage position:
Start with some initial amount of collateral.
Flash loan USD stablecoin.
Using that stablecoin that we just flash loaned, we will buy more collateral.
Then, deposit the collateral, which is the collateral that we had from step 0 and the collateral that we just bought, to Aave as collateral.
Once the collateral is deposited, we can borrow stable coins from the Aave protocol.
The stable coin that we just borrowed will be used to repay the flash loan from step 1.
That’s how we create a large leverage position without looping through the process of depositing collateral, borrowing stable coin, swapping the stablecoin for collateral and then re-depositing it as collateral.
A technical explanation of flash leverage to open a position - This lesson explains how to open a leveraged position in the Aave protocol using a flash loan and then repaying the loan with stablecoins.
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Course Overview
About the course
Rocket Pool rETH staking, yield mechanisms, trading options, and contract architecture
How to distribute rewards and calculate rETH/ETH exchange rate
How to acquire and redeem rETH
Integrating rETH into DeFi protocols like AAVE V3
How to how to create leveraged ETH positions using rETH
How to provide rETH as liquidity to Balancer and Aura
Getting the USD price of rETH using Rocket Pool NAV oracle
Re-staking with EigenLayer
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Last updated on July 25, 2025
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Course Overview
About the course
Rocket Pool rETH staking, yield mechanisms, trading options, and contract architecture
How to distribute rewards and calculate rETH/ETH exchange rate
How to acquire and redeem rETH
Integrating rETH into DeFi protocols like AAVE V3
How to how to create leveraged ETH positions using rETH
How to provide rETH as liquidity to Balancer and Aura
Getting the USD price of rETH using Rocket Pool NAV oracle
Re-staking with EigenLayer
DeFi Developer
$75,000 - $200,000 (avg. salary)
Smart Contract Engineer
$100,000 - $150,000 (avg. salary)
Web3 developer
$60,000 - $150,000 (avg. salary)
Smart Contract Auditor
$100,000 - $200,000 (avg. salary)
Blockchain Financial Analyst
$100,000 - $150,000 (avg. salary)
Web3 Developer Relations
$85,000 - $125,000 (avg. salary)
Last updated on July 25, 2025