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These protocols typically have various strong incentives to prevent drops below a certain collaterization ratio. There is a real danger that ETH/USD moves too
by cliftonk 6y ago
These protocols typically have various strong incentives to prevent drops below a certain collaterization ratio.
There is a real danger that ETH/USD moves too quickly while gas fees get too high for the system to function properly and we see a lot of defi losses. I don't think this is likely but it could happen.
- latchkey 6y agoOnly if you're just playing on ETH. There are other chains now that don't suffer from that issue.
- babyshake 6y agoA couple weeks ago there was a time period where there were tons of liquidations and gas fees were skyrocketing.
- ketamine__ 6y agoThe counterparty risk in also in the contract itself. Remember the DAO hack?