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/biz/ - Business & Finance

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20694512 No.20694512 [Reply] [Original]

So what happens when Zeus runs out of capital to borrow more link from aeve?

>> No.20694537

>>20694512
Look up what shorting means and what it entails. You don’t even know what you are saying

>> No.20694552
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20694552

>> No.20694678

>>20694537
I know what shorting is.

They borrow a certain amount of link on aeve, they sell the link and rebuy it in the future for a lower price to repay the aeve loan and release their collateral.

But if they're wrong they'd have to buy back that link at a higher price. My question is what happens if they cant buy it back and get liquidated, does the collateral just sit inside a smart contract forever?

>> No.20694775

>>20694678
getting liquidated on aave means others can purchase your assets at a discount. slightly cheaper link would be bought up very quickly

>> No.20695085

>>20694775
Wouldn't it be other assets held as collateral rather than LINK?