Collateral Calling: Lenders Claiming Tokens During the Loan Period

To protect the interests of lenders, ETHLend has implemented basic collateral calling enabling the lenders to claim the tokens used as collateral in the event of a drop in token value.

Therefore, if the value of the collateral drops to 100% or less of the original loan amount (upon setting data), the lender has the option to claim the tokens (collateral calling).

From a borrowers perspective, if your token is highly volatile and the loan period is long, you could mitigate some of this risk by asking for less than 67% of the collateral value, for example a loan with 40-60% of the collateral value would be much less likely to suffer from a collateral call.

To execute the collateral call, the lender will need to go into the loan, and click on the "Check Token Price" button. This button will check the token price, and if it is less than 100% of the loan value, another button called "Claim Tokens" will appear. Click on this, and confirm the transaction with MetaMask, the tokens will appear in the Lenders MetaMask account.