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The naive implementation of dynamic liquidation described above would allow the lender to take all of the collateral. A fairer and perhaps more sensible approach would instead only allow the lender to take an amount of collateral equal in value to the principal amount plus interest the borrower agreed to repay. Any leftover collateral would be returned to the lender as part of the liquidation transaction.
We are not sure if this sub-feature is feasible given the limitations of Element's scripting language, but we think this is worth investigating nonetheless.
The text was updated successfully, but these errors were encountered:
The naive implementation of dynamic liquidation described above would allow the lender to take all of the collateral. A fairer and perhaps more sensible approach would instead only allow the lender to take an amount of collateral equal in value to the principal amount plus interest the borrower agreed to repay. Any leftover collateral would be returned to the lender as part of the liquidation transaction.
We are not sure if this sub-feature is feasible given the limitations of Element's scripting language, but we think this is worth investigating nonetheless.
The text was updated successfully, but these errors were encountered: