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RE: How BitShares protects MPAs using Margin Calls
if nothing else happens, than what happens to the Alice's position if blockchain can't buy anything?
if nothing else happens, than what happens to the Alice's position if blockchain can't buy anything?
As the value of the collateral continues to go down, the maximum short squeeze price moves through the market. If the market does not provide sufficient liquidity to settle the full debt, at some point the value of the collateral may drop below the nominal value of the debt. At that point, the system collapses. We call that a "black swan".