Exposure refers to the amount of money or any other asset an investor stands to lose from a position.

In the context of DeFi, refers to the amount of risk that a user is taking on by using a particular DeFi application or protocol.

For example, if a user takes out a loan on a DeFi lending platform, their exposure would be the amount of the loan plus any interest or fees that they are responsible for paying. Similarly, if a user participates in a DeFi yield farming protocol, their exposure would be the amount of their capital that is being used to earn rewards.

« Back to Glossary Index