For borrowers this is like a guaranteed stop. Remember, in traditional stock market, or FX market there is never a guaranteed stop, at least not for retail customers. In case of a flash crash, if you're leveraged, a broker will liquidate you at the cruelest possible price, and then may try to foreclose your home to get its money back. Not so in Defi, and this is seriously cool
That makes sense, thanks to you and Tytanowy Janusz for explaining this stuff
Now that we have established what's in it for borrowers, why are lenders willing to lend their real coins for some potentially worthless stuff, especially if the liquidity pool can never be properly collateralized (which follows from your reasoning)? To me, it seems to be an extremely risky enterprise, given that the market can crash any minute which would trigger the domino effect leaving lenders with losses