Strike, led by Jack Mallers, has unveiled a new Bitcoin-backed loan product designed to prevent forced liquidation, regardless of Bitcoin's price fluctuations. The innovative loan structure eliminates the traditional price trigger mechanism linked to the loan-to-value ratio, ensuring that borrowers' Bitcoin collateral remains secure as long as repayments are maintained. However, if a borrower fails to meet interest or maturity payments within a 10-day grace period, partial liquidation of the collateral may occur. Currently, the loan is offered as a term loan in select U.S. states, with no support for lines of credit.
Strike Introduces Bitcoin Loan to Mitigate Forced Liquidation Risks
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