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A comment on DeFi and the “digital asset” felony hidden in the infrastructure bill. Parent comment

Re:DeFi and the “digital asset” felony hidden in the infrast... by newacc9 on Thursday November 04, 2021 @04:08PM (#29111943)
Generally, its loans that are over-collateralized with crypto-assets. Use case being: I need cash now but I think ETH will go up and I don't want to sell mine, instead I borrow stablecoin against my ETH using a DeFi app (probably on ethereum).
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Re:DeFi and the “digital asset” felony hidden in the infrast... by the_optimist on Thursday November 04, 2021 @04:15PM (#29112027)
Do you have an example of collateral management in this context?
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Re:DeFi and the “digital asset” felony hidden in the infrast... by newacc9 on Thursday November 04, 2021 @04:50PM (#29112399)
Its all automated, so it depends on the contract, I assume if the USD value of ETH drops too much, the borrower gets margin called.
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Re:DeFi and the “digital asset” felony hidden in the infrast... by the_optimist on Thursday November 04, 2021 @05:23PM (#29112706)
Can you reference a specific margin call mechanism?
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Re:DeFi and the “digital asset” felony hidden in the infrast... by newacc9 on Thursday November 04, 2021 @05:36PM (#29112813)
I found this for Compound. The liquidation mechanism is in section 11.

https://zengo.com/understanding-compounds-liquidation/

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