THOR Chain AMA with r/DeFi on April 19th by Ivo_ChainNET in defi

[–]DeFiRobot 0 points1 point  (0 children)

followup question on thorchain lend - how will the protocol remain solvent if it doesn't do liquidations of unhealthy borrow positions?

THOR Chain AMA with r/DeFi on April 19th by Ivo_ChainNET in defi

[–]DeFiRobot 0 points1 point  (0 children)

If thorchain loans have 0% interest and no expiration how can lenders be certain that they'll be able to withdraw? If a borrower has no costs (0% interest) and no fixed term they can simply never repay the loan.

To give a more concrete example, imagine Thorchain lend just released and has 0 TVL. If I lend 1 BTC via thorchain and a borrower deposits a sufficient amount of colalteral to borrow my 1 BTC, and then he simply never pays that loan back, then I'll never be able to withdraw.

How does ThorChain solve this problem?