@Falcon Finance Daily Quiz
A user's overcollateralization buffer is retained when minting USDf. Under what condition would they receive back fewer units of their original collateral from the buffer upon redemption?
A. If the market price of the collateral is higher at redemption than it was at the time of deposit.
B. If the market price of the collateral is lower at redemption than it was at the time of deposit.
C. If the sUSDf yield was negative during the period their collateral was locked.
D. If they held their sUSDf for less than the 3 month restaking period.
The Answer is A.
The protocol returns the initial dollar value of the buffer, so if the asset's price has increased, fewer units are needed to equal that original dollar value.
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