# Leverage

Leverage is a strategy that involves **using borrowed funds to expand investment size**, allowing users in Web3 lending protocols to take on **larger positions** based on their collateral. By leveraging, users can amplify potential returns if asset values rise; however, this also increases **risk due to price fluctuations**, as falling asset values can lead to a higher likelihood of liquidation. In Web3 lending protocols, leverage is typically implemented through **collateralized borrowing**, providing users the opportunity to maximize asset efficiency and enhance profitability potential.