Definition ∞ The process by which an entity acquires increasing financial obligations over time. This refers to the total outstanding liabilities, including loans, bonds, and other borrowed funds. Monitoring this growth is crucial for assessing financial health and stability.
Context ∞ In traditional and emerging digital finance, the build-up of liabilities can signal potential systemic risks or unsustainable financial practices. For decentralized finance protocols, understanding collateralized debt positions and their aggregated value is critical for evaluating protocol stability. The capacity for repayment relative to asset value is a key metric under continuous observation.
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