React's `useEffect` hook helps developers manage side effects in applications by providing a clean and predictable way to interact with external state. It takes two arguments: a callback function containing the side effect code, and an optional array of dependencies that determine when the effect is re-run. This simplifies codebase and makes it easier to reason about application behavior.
React's `useEffect` hook can lead to memory leaks if not properly cleaned up, causing performance issues and slow downs in applications. To prevent this, developers should include a return statement with a cleanup function when using `useEffect`.
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