@Falcon Finance Daily Quiz
Under what circumstances could a user's deposited collateral be liquidated in Falcon Finance?
A. If the Falcon Finance insurance fund becomes depleted.
B. If the user fails to stake their minted USDf into sUSDf within 30 days.
C. If the user redeems their sUSDf during a 7 day cooling off period.
D. If the market value of their volatile collateral falls below a certain threshold.
The answer is D.
Liquidation is a risk management feature to protect the protocol if the value of the locked assets drops too far, jeopardizing the overcollateralization.
