Aave stands at the forefront of decentralized finance, offering a solid lending protocol on the Ethereum blockchain. This platform enables users to borrow, lend, and earn interest on crypto assets without traditional bank-lending fees. While Aave may seem similar to centralized banks at first glance, it offers distinct advantages. Its decentralized nature allows for global participation without geographical restrictions. Transactions and loan approvals occur almost instantaneously, contrasting sharply with traditional banking processes. Users can borrow against a wide range of cryptocurrencies as collateral. Most importantly, borrowing on Aave doesn't impact traditional credit scores, opening financial opportunities to a broader audience.

For those bullish on Bitcoin's long-term potential, the Recursive Borrowing Strategy, used famously by Michael Saylor, offers an approach you can replicate to amplify your crypto exposure. This same strategy allowed MicroStrategy to accumulate an impressive $9.9 billion worth of Bitcoin, demonstrating its potential at an institutional scale. So if this technique is good enough for a multi-billionaire, it's good enough for me.

Strategy process example:

1. Deposit 1 token (worth $1000) as collateral.
2. With an 78% collateral factor (depending upon which collateral token used), you can borrow up to $780 USDT.
3. Buy Wrapped Bitcoin (WBTC) worth $780 USDT.
4. Deposit your bought $780 WBTC back as collateral.
5. Borrow $608 USDC (78% of 780).
6. Buy Wrapped Bitcoin (WBTC) worth $608 USDT
7. Deposit the $608 WBTC back as collateral
8. Continue this process...

The collateral factor is the amount you are able to borrow against your deposited collateral. It varies by asset and platform, which typically ranges from 50% to 80%. Higher factors allow for more borrowing but increase risk. The Health Factor is a crucial metric that determines the safety of your position. It must say above 1 to avoid liquidation.  Always borrow less than the maximum allowed to create a safety buffer. This is not a passive money-making task. This strategy demands active management. Frequently check your position, especially during high market volatility. Use indicators like the Bollinger Band Width Percentile to gauge your token market volatility. The falling value of your collateral decreases your Health Factor. Consider spreading risk across different token collateral types to mitigate volatility. Lastly, have a clear plan for exiting your positions if market conditions change unfavorably. Of course, as with anything crypto, there is a risk of getting wrecked. But the ~5% interest I would pay for borrowing a stable coin versus the ~200-600% Bitcoin gains are a no-brainer. With a risk/reward ratio that lopsided, I’ll make that bet every day.