# Yield-looping Vaults ### What is Raga doing on Hemi Network? With the growth of DeFi, yield trading enabled by Spectra and Pendle has become a go-to way for users to hedge their DeFi yield expectations. This has created PT-assets, a fixed yield product that generates a defined yield if held to maturity. [More details here](https://docs.pendle.finance/ProtocolMechanics/YieldTokenization/PT) Raga is working with the Spectra team to maximise returns on the PT assets through a yield-looping strategy. The basic premise is that the fixed yield on PT-assets on Spectra is higher than the borrowing rates for these assets, creating an arbitrage opportunity. Raga can use the PT-assets as collateral to borrow the base asset, and earn more PT-assets, earning the differential. This can be looped over multiple times to maximise the user returns. For example, bfBTC on Hemi is a yield-bearing BTC derivative with an ongoing PT-asset pool offering a fixed 6% return till Sep 25, 2025. The borrowing rate of BTC on Ajna (a borrowing/lending protocol) as of today is 2.5%. Here is how the strategy goes - 1. Deposit BTC into bfBTC Spectra pool on Hemi to get fixed yield PT-bfBTC (earns 6%) 2. Use PT-bfBTC as collateral on Ajna to borrow BTC (pay 2.5% interest rate) 3. Deposit borrowed BTC into bfBTC Spectra pool on Hemi to get more fixed yield PT-bfBTC (earns 6%) 4. Repeat the loop to reach a target leverage For each loop, the user earns an additional 3.5% (6% yield - 2.5% interest rate). **At 3x leverage, the users generate 13% returns instead of the base 6%, more than doubling the returns.** Yield-looping vaults on Hemi are undergoing audits and will go live soon --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.raga.finance/hemi/yield-looping-vaults.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.