I deposited crypto to borrow stablecoins. How can a big drop in the coin’s price lead to liquidation?
My understanding: the health factor changes with prices. If the collateral price falls or the price of the borrowed asset rises, the health factor goes down.
Mainstream decentralized lending protocols use overcollateralization: the value you can borrow is less than the value of your collateral.
$AAVE is the governance token of the decentralized lending protocol Aave. Its current price is 150.94.

#AAVE