Behind the scenes of every successful lending protocol is a robust risk management system. JustLend DAO incorporates a sophisticated liquidation and risk control architecture designed to maintain stability under extreme market conditions.
Key components include:
1. Over-Collateralization
Borrowers must maintain collateral ratios above defined safety thresholds. This ensures loans remain fully backed even during volatility.
2. Automated Liquidations
When collateral drops below required minimums, the protocol triggers automated liquidations, preventing bad debt accumulation.
3. Oracle-Based Price Feeds
JustLend uses decentralized, secure oracles to ensure accurate, real-time asset valuations.
4. Risk Parameters Per Asset
Each asset has tailored parameters including:
Collateral factor
Reserve factor
Liquidation threshold
Interest model
This makes the protocol highly resilient, reducing systemic risk.
5. Capital Efficiency With Safety
The system is designed to maximize borrowing power without compromising solvency — a balance that many DeFi protocols struggle to achieve.
The result is a mature, institutional-grade lending infrastructure, giving users confidence in the long-term stability of JustLend DAO.
