YIELDS & RETURNS

Borrowing (DeFi Borrowing)

Definition

Borrowing in DeFi allows users to borrow crypto assets by providing collateral. This enables leverage, liquidity access, and various trading strategies without selling existing holdings.

Example

💡 Example

You can borrow USDC against your ETH collateral on Compound to maintain ETH exposure while accessing liquidity.

Risks to Consider

⚠️ Risks
  • Liquidation risk
  • Interest rate increases
  • Collateral price drops

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