Let’s talk about decentralized lending.
The liquidation threshold for each type of collateral is usually higher than its loan-to-value ratio, so even when you borrow up to the limit, there’s still some buffer before liquidation.
One thing many people overlook: decentralized lending doesn’t involve credit checks. Borrowers are simply anonymous addresses, so protocols have to rely on the collateral being worth more than the loan to manage the risk of bad debt.
Keep an eye on your health factor during periods of extreme market volatility. If needed, add collateral or repay part of your loan in advance.
Holders of $AAVE can vote on proposals concerning Aave’s interest rates and collateral parameters.
The liquidation threshold for each type of collateral is usually higher than its loan-to-value ratio, so even when you borrow up to the limit, there’s still some buffer before liquidation.
One thing many people overlook: decentralized lending doesn’t involve credit checks. Borrowers are simply anonymous addresses, so protocols have to rely on the collateral being worth more than the loan to manage the risk of bad debt.
Keep an eye on your health factor during periods of extreme market volatility. If needed, add collateral or repay part of your loan in advance.
Holders of $AAVE can vote on proposals concerning Aave’s interest rates and collateral parameters.