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If those loans are no-recourse loans with this FTT token as collateral, then should the token crash the liability just "disappears". The collateral will be sold
by aljungberg 4y ago
If those loans are no-recourse loans with this FTT token as collateral, then should the token crash the liability just "disappears". The collateral will be sold to cover the loan. If the collateral is now worthless that was the risk the lender agreed to take on when issuing a no-recourse loan.
If they are Defi loans for example, they're pretty much automatically no-recourse loans.
- cryptoanon 4y agoExactly. It seems like the author has very limited insight in the space. It makes you curious how they could come to such a headline/conclusion, when they spend the entire article, talking about the assets instead of the liabilities!
- automatic6131 4y ago>It seems like the author has very limited insight in the space. lol. Lmao, even.
- gjvc 4y agoYou ought to know by now that HN readers are experts on everything.
- NotYourLawyer 4y agoAre no-recourse loans typical in this space? Seems insane.
- josu 4y agoUnless their liabilities are also in FTT.
- jevgeni 4y agothat kind of a dynamic is not unique to crypto.