👻Liquidations
Protocol as Counterparty
Loans continue indefinitely until the principle with interest is repaid or the collateral is margin called. If collateral is margin called, it is claimed by the protocol, allowing a Collector to obtain it via the Redemption Mechanic by burning $NFT. Effectively, the protocol is agreeing to purchase the asset at the margin maintenance price. Generally this will result in a surplus of value flowing to $NFT stakers, though losses are possible if the value of a collateral suddenly gaps down in excess of the margin maintenance buffer.
Liquidation Mechanics
Protocol Solvency
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