They would do it because they want or need your collateral more than they want or need your fiat. I’m not suggesting there’s anything deviant in it. They can just decide that they will not roll over any more and only close loans by taking the correct portion of collateral. Then you’re free to deposit more bitcoin to take a new loan of the same value
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And so they close it. You move on. I am not suggesting you do this if you have to go above 10% LTV. Ideally less than 2.5% with 10% max.
I do NOT believe this is a valid strategy for people with less than 10 BTC. In 5 years it likely will be available to those with 2-5...
You can also spread the risk across lenders, but I gotta be honest I don't see your scenario playing out. I see a wide open field and companies competing for business. I see an entire new industry springing up to unlock capital locked in Bitcoin. I think we have blue skies for several years to come. IMO of course...and without doubt it introduces counter party risk. Life comes with risk...
I’m a user of the product and agree with your sentiment, them not allowing the rollover is just one of the “what-ifs” I play through in my head