A friend recently asked me about this, so I decided to write it down.
When the health factor of a borrowing position on Aave falls below 1, liquidators can liquidate the position.
Decentralized lending has no credit checks. Borrowers are simply anonymous addresses, so the protocol can only manage bad-debt risk by ensuring that the value of the collateral exceeds the amount borrowed.
Holders of $AAVE can vote on proposals regarding Aave’s interest rates, collateral parameters, and more. Currently: 114.98.
What’s your take on this? Let’s discuss in the comments.
When the health factor of a borrowing position on Aave falls below 1, liquidators can liquidate the position.
Decentralized lending has no credit checks. Borrowers are simply anonymous addresses, so the protocol can only manage bad-debt risk by ensuring that the value of the collateral exceeds the amount borrowed.
Holders of $AAVE can vote on proposals regarding Aave’s interest rates, collateral parameters, and more. Currently: 114.98.
What’s your take on this? Let’s discuss in the comments.
