DeFi Looping: Innovation or Risky Leverage?
Update: 2025-09-12
Description
DeFi's $250M Ethereum market is seeing 30% of its activity driven by looping—a leveraged borrowing strategy where users repeatedly borrow and reinvest crypto for amplified returns. Experts warn this trend, fueled by staked Ether and yield-bearing stablecoins, introduces significant risks, potentially mirroring past market collapses like USDT and FTX. While looping boosts innovation and profits, its inherent leverage demands vigilance from traders and platforms alike to avoid future market shocks.
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