Instruction:

1. Deposit Collateral: Deposit stablecoins (e.g., USDC) and WBTC/ETH into Aave as collateral.
2. Borrow Assets: Borrow stablecoins against the collateral.
3. Reinvest: Optionally reinvest the borrowed ETH/WBTC for additional yield or hold them expecting price appreciation.

Risks:

1. Liquidation Risk: If the collateral value drops significantly relative to the borrowed amount, your position could be liquidated.
2. Smart Contract Risk: Potential vulnerabilities in Aave’s smart contracts. While Aave is well-audited, past incidents like the Yearn Finance exploit highlighted risks in DeFi.
3. Network Risk: Arbitrum is a layer-2 solution; any issues with its infrastructure can impact your position.