Repay your Debt with Mero

3 min readDec 15, 2022


Mero’s reactive liquidity is growing! Today we are excited to announce that debt repayments are now live in addition to collateral top-ups. Meaning, liquidity on Mero can react to user-defined conditions and autonomously shift between aggregating yield, topping up collateral, or repaying debt. In this post we’ll cover how Mero debt repayments work and how you can use them to start managing your debt like a pro.

Debt repayments

Making debt repayments from Mero is easy and works just like registering collateral top-ups. Any user who holds Mero LP tokens can repay their outstanding debt, on protocols such as Aave & Compound, using their Mero liquidity. Once debt repayments are registered, liquidity will stay in Mero pools, earning high yields up until the very moment user-defined conditions are met (i.e. a specific health factor threshold is reached). At which point a pre-defined portion of the user’s Mero liquidity will automatically be used to make a debt repayment.

Precisely shifting liquidity between Mero pools and other protocols can have a compounding effect on a user’s DeFi portfolio. Yielding a 30 day average APY of around 10%, Mero stablecoin pools have the power to significantly increase the yield you are earning while your funds automatically shift to where they are needed.

While Mero collateral top-ups enable users to allocate their excess collateral to farm yield through Curve and Convex, debt repayments enable users to pay off their debt in a highly efficient manner. Furthermore, by utilizing automated debt repayments users can:

  • Hedge against the volatility of their borrowed or collateralized assets
  • Earn high yields until a debt repayment is needed
  • Make debt repayments exactly when it’s needed

How to register a debt repayment position

The first step to registering debt repayments for your outstanding loans is providing liquidity into a Mero pool. After providing liquidity, users can use their Mero LP tokens to register an Action.

Mero will automatically detect any loans in your wallet that you can create an Action for

Once the process of creating an Action is started users can choose between registering debt repayments, collateral top-ups, or both.

It is important to note that debt repayment positions can only be created using the Mero pool for which the underlying asset is the asset being borrowed. For example, a user borrowing USDC would only be able to register debt repayments using meroUSDC LP tokens.

Once a user has the aforementioned criteria or steps completed, they can register their own custom parameters that determine exactly when a debt repayment will be executed.

Once a debt repayment position is registered there’s nothing else that needs to be done by the user. Their assets will stay in Mero pools earning yield up until the very moment their loan reaches the health factor they selected. At which point a debt repayment will be executed autonomously. If the parameters, specifically the health factor, that are selected by the user are never reached their liquidity will stay in Mero pools earning yield. Furthermore, debt repayment positions can always be closed and liquidity can be withdrawn from Mero pools at anytime.

Debt management strategies

Through the automated shifting of liquidity between yield aggregating liquidity pools, collateral top-ups, and debt repayments, Mero can be used to create optimized yield-farming or debt management strategies. The personalized and automated portfolio management that Mero enables will continue to grow in the future as more Actions become supported. Join us on Discord to learn more about how you can optimize your portfolio with Mero 👉

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