How to Loop STRC for Leveraged Bitcoin Yield: A Step-by-Step Guide
Looping a yield-bearing asset is one of DeFi's oldest plays, and for good reason: done right, it multiplies a mid-teens APY into something genuinely competitive with any risk asset in the market. Strategy's STRC — the 11.5% Bitcoin-backed preferred stock Michael Saylor launched in 2025 — is the best new looping collateral to appear in years.
This guide walks through exactly how to open a leveraged STRC position on Spreads, from wallet setup to live dashboard monitoring. Plan on about five minutes from start to finish.
ℹ️ New to STRC?
If you need background on what STRC actually is and why it makes sense as a yield-bearing asset, start with our complete guide to STRC vs MSTR. This article assumes you already know the basics and are ready to execute.
Before You Start: What You'll Need
- A Web3 wallet. MetaMask, Rabby, or any standard EVM-compatible wallet works.
- USDC on the Ink network. Ink is Kraken's Layer 2, where Spreads operates. The Spreads Loop System takes USDC as its single deposit asset.
- A small amount of ETH on Ink for gas. Gas on Ink is a fraction of a cent per transaction, but your wallet needs a minimum to execute.
- At least ~$110 in USDC. This is the practical minimum deposit — driven by the per-swap minimum that each loop iteration has to clear.
- About five minutes.
If you have funds on Ethereum mainnet, Arbitrum, Optimism, or Base, you can bridge to Ink via any standard bridge.
Step 1: Connect Your Wallet
Open the Spreads app and click "Connect Wallet" in the top right. Select your wallet provider. Approve the connection request. The app will automatically prompt you to switch to the Ink network if you're on a different chain.
💡 First time on Ink?
Add the network to your wallet through Spreads — it's one click and injects the correct RPC and chain ID, avoiding the usual manual network-add.
Step 2: Deposit USDC
Spreads' Loop System takes USDC as the single deposit asset. All internal conversion to STRC and wrapping to wSTRC happens inside the transaction — you don't need to source STRC yourself, and you never handle the intermediate steps.
Enter the USDC amount you want to open the position with. For this walkthrough, assume $1,000 USDC.
ℹ️ Why the ~$110 minimum?
The loop performs multiple swaps, and each one must meet a per-swap minimum size. At smaller deposits, later iterations of the loop would fall below that minimum and the transaction would fail. The system solves for the floor at which every swap clears the bar — which lands around $110 for 3x leverage.
Step 3: Choose Your Leverage Target
This is the most important decision in the workflow. Spreads supports three discrete leverage targets: 2x, 3x, and 3.5x. There is no free slider — the levels are designed around specific health factor targets that keep positions safe.
Leverage Comparison on $1,000 Deposit
*Assuming 11.5% STRC yield and ~2% USDC borrow rate. Click a row to highlight.
| Leverage | Health Factor | wSTRC Exposure | Net APY* | Risk Profile |
|---|---|---|---|---|
| 2x | 1.20 | ~$2,000 | ~21% | Conservative |
| 3x | 1.20 | ~$3,000 | ~29% | Balanced |
| 3.5x | 1.10 | ~$3,500 | ~35% | Maximum |
What the health factor means. It's a ratio of your collateral value to your borrowed debt, adjusted for the market's liquidation threshold. A higher number = more cushion before liquidation. 1.20 (the target at 2x and 3x) is a meaningful buffer. 1.10 (the target at 3.5x) is intentionally tighter — the 3.5x level trades a thinner buffer for higher effective APY.
💡 Recommendation for first-time users
Start at 2x. The APY is nearly as good as 3x, and the position behaves predictably through ex-dividend events and minor STRC price swings. You can always close and re-open at 3x or 3.5x once you've seen how it behaves.
Before confirming, the interface shows:
- Final wSTRC exposure (how much STRC-equivalent you'll end up holding)
- Target health factor (per the leverage chosen)
- Estimated net APY
- Minimum deposit check (confirms your amount clears the per-swap floor)
Step 4: Review and Confirm
Before signing the transaction, the confirmation screen summarizes the position:
- Your USDC deposit
- Your target leverage
- Target health factor
- Final wSTRC collateral and USDC debt (approximate)
- Projected net APY
- Estimated gas cost
If everything checks out, click "Open Position" and sign the transaction in your wallet.
The loop executes iteratively in a single on-chain flow:
How the Loop Executes (Single Transaction)
On Ink (Kraken L2), the full loop settles in seconds. Gas costs a fraction of a cent.
Step 5: Monitor Your Position
Once confirmed, your leveraged position appears in the Spreads dashboard. Here's what's visible at a glance:
- Live APY. Updated continuously based on current STRC yield and current USDC borrow rates.
- Accumulated dividends. STRC distributions arrive at each scheduled payment event; the dashboard shows what's accrued and what's been paid.
- Next dividend date. Under the current schedule, monthly; under the proposed semi-monthly schedule, twice monthly.
- Health factor. Your live HF, with your target (1.20 or 1.10) as the design reference. A position may drift slightly from its target between dividend cycles; this is normal.
- One-click unwind. The same atomic iterative mechanism that opened the position closes it.
Step 6: Compound, Deleverage, or Exit
You have several paths from here:
- Hold and collect. Let dividends accumulate. Simplest path, works for most users.
- Compound. Redeposit accumulated dividends at your current leverage level to increase the position.
- Partial deleverage. If you're at 3.5x and market conditions shift, you can unwind down to 3x or 2x without closing fully. Spreads executes this by unwrapping and selling just enough wSTRC to pay down debt to the new target HF.
- Full exit. Close the entire position in one click. The unwind flow:
- Snapshots wallet balances (delta-based safety)
- Withdraws wSTRC from the lending market within health-factor safety bounds
- Unwraps wSTRC to STRC
- Swaps STRC to USDC
- Repays USDC debt
- Repeats until the target (full close or new leverage level) is reached
⚠️ Delta-snapshot safety
The delta-snapshot step matters: it ensures partial-unwind operations can't push the position into an unsafe HF state mid-transaction.
Frequently Asked Questions
How long until I see my first dividend?
STRC pays on a scheduled monthly (soon semi-monthly) cycle. Your wSTRC position accrues entitlement from the moment you open it; distribution arrives on the next STRC payment date.
What happens if STRC drops below $100?
This happens briefly around ex-dividend dates — the April 14 ex-dividend event pushed STRC to $99.39 briefly. Strategy's variable-rate mechanism typically pulls STRC back to $100 within days by adjusting the dividend rate. At 2x leverage (HF 1.20), the margin handles this comfortably. At 3.5x (HF 1.10), your buffer is thinner — size your position accordingly.
Can I loop with STRK, STRF, or STRD instead?
Not currently. Spreads is STRC-focused because STRC's price-stabilization mechanism makes it far more suitable as looping collateral than the variable-price preferreds. STRK, STRF, and STRD trade on price rather than being held near par — they're not appropriate as stable collateral for leveraged positions.
What's the difference between STRC on Nasdaq and wSTRC onchain?
STRC is the Nasdaq-listed preferred stock. wSTRC is the onchain wrapper representing the same economic position — same price, same yield, usable as DeFi collateral.
Are my funds custodied?
No. Spreads is non-custodial. Your wSTRC collateral sits in the Spreads lending market under your position; any residual USDC remains in your wallet. Spreads does not hold user funds.
Can I open a position at a leverage between 2x and 3x?
No. Spreads supports only the three targets (2x, 3x, 3.5x) because each is paired with a specific health factor design. Arbitrary intermediate levels would require per-position parameterization that makes monitoring and liquidation math more complex.
How does the one-click exit work?
When you click exit, Spreads atomically unwinds the loop: it withdraws wSTRC, unwraps it to STRC, swaps STRC back to USDC, repays the USDC debt, and returns any residual USDC to your wallet. Everything happens in a single transaction — there's no half-open state.
What if my health factor drops to 1.05?
At that point, the position becomes liquidatable. Before it reaches that point, you can partially deleverage (3.5x → 3x → 2x) or fully exit. The dashboard shows your live HF and the liquidation threshold continuously.
Does Spreads support more than one active position per wallet?
Yes. You can run a 2x position and a 3x position simultaneously from the same wallet, or open and close positions at different leverage levels over time. Each position is tracked independently in the dashboard.
What chains is Spreads deployed on?
Spreads is currently deployed on Ink, which is Kraken's Ethereum Layer 2. Additional chains may be added over time as wSTRC availability expands.
Ready to Try It?
If you've made it to the end of this guide, you know more about looped preferred stock yield than 99% of crypto users. The easiest way to understand how this actually feels is to open a small test position — even the ~$110 minimum is enough to see a full dividend cycle and decide whether you want to scale up.
Nothing in this guide is investment advice. Leveraged positions can be liquidated. Always understand the risks, and never deploy capital you cannot afford to lose.