How do DeFi protocols know when your collateral has fallen in value?
Lending and derivatives platforms use oracle-provided prices to calculate collateral ratios and trigger liquidations.
When prices rise or fall sharply, oracle prices may briefly diverge from exchange order books, so leave a sufficient safety buffer in your lending position.
$LINK is the token of the oracle network Chainlink.
What would you like to see next? DeFi or something else?