So say ive minted crvUSD against my ETH collateral, ETH

dumps below my set bands and I get liquidated, are there liquidation penalties or something even if the price recovers, so in theory, you need to be careful of maxing out LTV or something like that?

Yes always need to be careful maxing out LTV. I think Mich said it would be up to around 91% or so. As the collateral decreases in price, and drops below X band threshold and suffers devaluation, it is swapped to crvusd. Of course if the price recovers, it's swapped back (may incur a very small loss). if the collateral price continues to drop, and your health factor turns negative meaning it's dropped below all active bands, then you're fully liquidated. Depositor would incur a penalty at this point, but honestly I don't know that that percentage would be at this point.

thanks - thats really helpful and perhaps answers my question. when you say "your health factor turns negative... you're fully liquidated".. are you saying that the liquidation has gone past the point of being reversible

Are you saying even a full liquidation is less painful? 🤔

Yes essentially. Since part of the collateral would have already been devalued, without incurring really any penalty when liquidation happens, loss over the entire position would be reduced considerably relative to being fully liquidated in one go.

Oooo right. Damn nice.

another upside, speculating here, is that you have more time to react and repay your debt, as its slowly liquidating

Yeah very true, Those bands act as a buffer to protect your position but obviously, you can still rekt yourself if you're maxing out LTV and going full degen

Yea absolutely - i was just trying to undertand the extreme scenarios, because previously i didnt understand the full liquidation once it left the liquidity bands

That would be the flame in Chad mode!