Ok I guess I was missing the basics on overcollateralization, https://www.investopedia.com/terms/o/overcollateralization.asp https://www.investopedia.com/terms/

Ok I guess I was missing the basics on overcollateralization, https://www.investopedia.com/terms/o/overcollateralization.asp https://www.investopedia.com/terms/o/overcollateralization.a... answers my question, it was actually not blockchain-specific.