I was wondering what happens in a catastrophic event where bitcoin’s price drops, let’s say, 35%. If a client’s collateral is for example 1 bitcoin / 10k$ , and the price of bitcoin drops to 6$, the client can ‘run away’ with 8k$ in cash, and SALT platform ‘stays’ with one bitcoin worth 6.5k$. Am I right?
How’s SALT is going to survive in such a drop?
What i know is that if perosn gives 10,000$ worth of Bitcoin to Salt lending platform - Salt platform gives 80% of Bitcoin price and that is 8000$ and keeps 2000$ for amortization . If the price of Bitcoin drops and gets close to 8000$ client would be warned about this and would be asked to put more money on platform to keep their bitcoin safe. In case client does nothing - Salt sells the bitcoin.How’s SALT is going to survive in such a drop?