Lido Develops Fallback Exits to Let Lenders Use Borrower Collateral

Lido is developing Fallback Exits for Lido Lend, a feature that would let lenders use borrower collateral to cover part or all of a withdrawal when an isolated market lacks enough of the requested asset. When the feature is used, collateral would be taken first from borrowers whose positions are closest to the liquidation loan-to-value (LLTV) threshold. Their outstanding debt would be reduced by a corresponding amount. Lido Lend is built on a modified version of Morpho Blue and uses isolated markets pairing related assets, such as wrapped Ether (wETH) with wrapped staked Ether (wstETH), or U.S. dollars with U.S.

Source: TokenPost