Jack what happens to the loan if bitcoin drops 50%+ in USD value?
Discussion
nothing.
if you’re wondering about margin call and liquidation, you can read more here: https://strike.me/faq/what-are-margin-calls-and-liquidations/
I wouldn’t call margin calls and liquidations nothing.
Looks like from what I read you’d get at least 2 margin calls in a 50% drop and have to add collateral each time within 24hrs to avoid liquidation.
Seems awful risky for plebs.
Then over collateralize yourself? The app requires 50% loan to value but does not prevent you from allocating additional collateral, and makes it very clear where the margin call and liquidation prices sit in relation to the amount of collateral pledged.
And give up custody of more bitcoin no thanks!