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binji 🔴
@binji.eth
moonwell will be so obvious in hindsight a team of phoenixes building on the superchain proof that nothing can replace grit and perseverance https://moonwell.fi/discover
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Crovv | Acting Director of GOCA
@crovv
Little confused on this one Traditional lending allows you to lend with colleteral (house, car) and keep using it while the lender has the right to seize the asset in case you fail to make payments. Here you supply 1000$ USD, and lend 600$, giving you 600$ for your 1000$ Does that deposit amount stake or something?
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Mkkstacks
@mkkstacks
Consider if you collateralized your staked ETH for USDC pegged to the dollar. Using your numbers, lets say you gave $1000 worth of wETH and borrowed $600 USDC. With overcollateralization, the protocol is better protected in case of market swings. Otherwise, your collateral may become worth less than the loan.
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Mkkstacks
@mkkstacks
If the value of ETH declines, the protocol has enough cushion to liquidate your wETH before it has a chance to become less than your loan of $600 USDC. Or if the value of wETH increases forever, you could take forever to pay it back. I wonder if a borrower could borrow more against the same loan if so.
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