Decentralized finance (DeFi) leverage products can amplify systemic risk. By enabling high leverage, they increase market volatility and interconnectedness, as seen in traditional finance crises. DeFi's lack of centralized oversight and reliance on smart contracts, which may have vulnerabilities, heightens the potential for cascading failures. Liquidation spirals, like those in the 2022 crypto crash, show how leveraged positions can destabilize markets. However, proponents argue DeFi's transparency and over-collateralization mitigate risks compared to opaque traditional systems. Still, without robust risk management, leverage in DeFi could propagate shocks across protocols, threatening the broader ecosystem.