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spectra_get_looping_strategy

Calculate projected yields and risk for a leveraged fixed-yield strategy using Spectra PT and Morpho looping. Enter chain and PT address to see APY at up to 20 leverage levels.

Instructions

Calculate a leveraged fixed-yield strategy using Spectra PT + Morpho looping.

Strategy: Deposit asset -> mint PT on Spectra -> use PT as collateral on Morpho -> borrow underlying -> deposit again -> repeat. Each loop multiplies yield exposure.

Returns projected yields at different leverage levels (1x to max safe leverage), effective APY, and risk parameters.

Automatically fetches the live Morpho borrow rate and LLTV when a matching market exists. You can still override morpho_ltv and borrow_rate manually if needed.

NOTE: Looping requires a Morpho market that accepts the specific PT as collateral.

Risk context:

  • Borrow rates are variable. A 5% spread (7% yield - 2% borrow) can turn negative if borrow rates spike above your fixed yield. Monitor rates in Morpho.

  • Higher leverage amplifies both returns and liquidation risk. Consider keeping 1-2 loops below maximum for safety buffer.

  • Entry cost (price impact) compounds across loops — each iteration faces degraded effective pool liquidity.

Use morpho_list_markets to find available Morpho markets. Use spectra_scan_opportunities to discover the best looping opportunities across all chains with capital-aware sizing.

Input Schema

TableJSON Schema
NameRequiredDescriptionDefault
chainYesThe blockchain network
pt_addressYesThe PT contract address to loop
morpho_ltvNoOverride Morpho LTV ratio (e.g. 0.86 = 86%). If omitted, auto-detected from Morpho.
borrow_rateNoOverride Morpho borrow rate in % APY. If omitted, fetched live from Morpho.
max_loopsNoMaximum number of loop iterations to calculate (default 5)
Behavior5/5

Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

No annotations provided, so description carries full burden. It explains the looping mechanism step-by-step, that it fetches live data but allows overrides, and provides detailed risk context about variable borrow rates, liquidation risk, and entry cost. Discloses key behavioral traits such as auto-detection of LTV and borrow rate.

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Conciseness4/5

Is the description appropriately sized, front-loaded, and free of redundancy?

Well-structured with a summary sentence upfront, then bullet-rich paragraphs. Slightly lengthy but each sentence adds essential context (e.g., risk notes, prerequisites). Could be trimmed slightly without losing value, but still efficient.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Completeness5/5

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

Given complexity (5 params, no output schema), description covers prerequisites, risks, return values (projected yields, effective APY, risk parameters), and links to related tools. All necessary context for an agent to understand and correctly invoke the tool is present.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Parameters4/5

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

Schema coverage is 100%, but description adds value beyond schema: clarifies that morpho_ltv and borrow_rate can be auto-detected or manually overridden, and that max_loops defaults to 5. This reduces ambiguity and aids correct usage.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Purpose5/5

Does the description clearly state what the tool does and how it differs from similar tools?

The description clearly states it calculates a leveraged fixed-yield strategy using Spectra PT and Morpho looping. It uses specific verbs ('calculate', 'returns projected yields') and distinguishes from sibling tools like pendle_get_looping_strategy (different protocol) and morpho_list_markets (different purpose).

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Usage Guidelines5/5

Does the description explain when to use this tool, when not to, or what alternatives exist?

Explicitly mentions when to use: 'Automatically fetches the live Morpho borrow rate' and constraints: 'requires a Morpho market that accepts the specific PT as collateral'. Provides alternatives: 'Use morpho_list_markets to find available Morpho markets. Use spectra_scan_opportunities to discover the best looping opportunities...'.

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.

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