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How does the Boost feature work?

Brief introduction to our Boost feature for MakerDAO.
Written by Nikola Jankovic
Updated 6 days ago

Boost is a leverage increase option that can increase your exposure to the selected asset by taking on more debt.

More specifically, Boost generates more DAI, swaps those DAI for the used collateral and instantly adds those new funds to your MakerDAO Vault, increasing your leverage and exposure to that asset.

For example, if you have an ETH Vault, Boost will:

  1. Generate selected amount of DAI
  2. Swap those DAI for ETH using one of the integrated liquidity sources
  3. Add the new ETH to your Vault

All three steps are completed within one transaction.

Boost is most often used by those who utilize the MakerDAO protocol as a decentralized option for longing ETH or other supported assets. You would either use Boost when the market dips, to benefit from a potential recovery, or you could use it when you believe the market will continue moving up.

If you're interested in learning more about longing assets with decentralized finance protocols, we recommend reading our  How to long or short any asset using DeFi lending protocols post.
You can also configure Automation to automatically boost your Vault in case market keeps going up. We wrote about the potential benefits of this in our Automation performance analysis post.
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