484 sats \ 4 replies \ @kr 1 Dec 2022 \ on: Hello Stackers! Bold is a credit card backed by your bitcoin stack. AMA! bitcoin
In your view, what is the biggest risk bitcoiners should be aware of when using Bold?
Great question - we all know the price of bitcoin fluctuates. That means your credit limit does too.
So you need to stay within the acceptable LTV. We of course help you do so, and notify you if you are getting close to the limit.
reply
Really interesting product. So if a user's LTV crossed the acceptable threshold how would that impact the bitcoin held as collateral? And what could a user do to avoid losing that collateral?
reply
Our goal is for you to keep the bitcoin you put up as collateral. So we will be in communication at any point your LTV approaches critical levels. We are also developing some future "safety features" but those won't be ready at launch.
But the basic answer is that when your LTV crosses a dangerous threshold you will get a margin call to put up more collateral. You could also just pay down your balance owed.
reply
Just pay the bill probably if you don’t have the money then you get liquidated. That’s how margin works
reply