@cryst4l9
Overcollateralized lending is the backbone of DeFi. It ensures protocols remain solvent by requiring borrowers to deposit more collateral than they borrow.
Health factors and liquidation thresholds are key. If your collateral value drops too low, your position is liquidated to cover the debt, protecting lenders and the protocol. Keeper bots automate this process, crucial for maintaining stability. Understanding these mechanics is vital for safe DeFi participation.
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