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by RustyConsul 1519 days ago
Four risks with margin loans. The first two also apply with crypto:

1.) Amplified losses if the securities in your account decline in value

2.) Margin calls or liquidation of securities

3.) Losses greater than the original investment are possible

      - Not possible due to constant access via oracles to the underlying asset. The Protocol may experience more loss in very rare instances, but as an individual i never will.
4.) Interest rates may rise, increasing the cost of your loan.

And due to 3.) is why you have an 'interest rate'. I have no rate of interest on my margin loan. The protocol generates money from trade fees, more liquidity is and leverage increases TVL.