etc. users who have super high LTVs for some asset and hence risk the protocol accruing bad debt pay the same interest rate as someone who has a low LTV and hence risks the protocol accruing bad debt much less...
is fraxlend working on some kind of interest rate curve to tackle this? @samkazemian
The lending is over collateralized so what matters is the Vol of the collateral. The LTV can be adjusted to reflect this. If you were doing uncollat lending then you would probably need to build borrower curves.
that’s not what i mean… if i have a high LTV i pay the same interest rate as someone with a low LTV… but the change of me getting liquidated and hence accruing bad debt is higher
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