Leverage refers to the use of debt to amplify the returns of an investment.

In the context of crypto and decentralized finance (DeFi), leverage is often used by traders to increase their buying power and potentially earn larger returns on their investments.

For example, a trader might use leverage to borrow funds from a lending protocol in order to buy more of a particular cryptocurrency than they could afford with their own capital. This allows the trader to potentially earn larger returns if the price of the cryptocurrency increases, but it also increases their risk, as they are now responsible for repaying the borrowed funds plus any interest or fees.

Overall, leverage is a common tool used by traders in the crypto and DeFi markets to potentially increase their returns. However, it is important for users to carefully consider the risks associated with using leverage, as it can significantly increase their exposure to potential losses.

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