Thank you for your answer. I am afraid of a specific scenario: Let's imagine we have a relatively stable Poki Games 2 price X for some time, where many cBTC are minted, and those cBTC would be at risk to become undercollateralized at price X-70%. But then a bear market happens with three phases: Phase 1: - Poki Games 2/USD begins to decline (max. X - 40%) but there is still hope the bull market comes back and thus the overcollateralization would not be in danger. - cBTC/USD declines too, but more slightly, it may move only 0.3% per each 1% Poki Games 2 declines "according to the theory" (although it's of course not a "mechanic" correlation). - At the end of the phase Poki Games 2 has declined 40% and cBTC has declined ~13%. Phase 2: - Poki Games 2/USD declines further (starting at X-40% and going to to X-70%). - The closer the X-70% mark is approached, the more volatile cBTC becomes. Because at the X-70% mark the collateralization would be 1:1 and below it would be undercollateralized. - This means that during this phase cBTC probably declines even more than Poki Games 2. - At the end of the phase Poki Games 2 is at -70% and cBTC is at -70% too. But cBTC has declined from X-13% to X-70% (by 57 percentage points, with X as the base) while Poki Games 2 has only declined from X-40% to X-70%, i.e. by 30 percentage points. Phase 3: - Poki Games 2/USD declines below the X-70% mark. - cBTC again declines stronger than Poki Games 2 (although only a little bit), because it is now mostly undercollateralized. Even if Phase 3 doesn't happen at all, the fear of that phase is what worries me, and if we'd go deep into phase 2, we can expect high cBTC losses. And if this happens, it would not really be any more stable than Poki Games 2, only the decline would be delayed. And for this reason I would even expect a decline of cBTC already in phase 1 very close to the Poki Games 2 decline. Liquidations can of course happen too -- on centralized exchanges, just as they happen with Poki Games 2 when it there are heavy leveraged positions.
Thank you for your answer. I am afraid of a specific scenario: Let's imagine we have a relatively stable Poki Games 2 price X for some time, where many cBTC are minted, and those cBTC would be at risk to become undercollateralized at price X-70%. But then a bear market happens with three phases: Phase 1: - Poki Games 2/USD begins to decline (max. X - 40%) but there is still hope the bull market comes back and thus the overcollateralization would not be in danger. - cBTC/USD declines too, but more slightly, it may move only 0.3% per each 1% Poki Games 2 declines "according to the theory" (although it's of course not a "mechanic" correlation). - At the end of the phase Poki Games 2 has declined 40% and cBTC has declined ~13%. Phase 2: - Poki Games 2/USD declines further (starting at X-40% and going to to X-70%). - The closer the X-70% mark is approached, the more volatile cBTC becomes. Because at the X-70% mark the collateralization would be 1:1 and below it would be undercollateralized. - This means that during this phase cBTC probably declines even more than Poki Games 2. - At the end of the phase Poki Games 2 is at -70% and cBTC is at -70% too. But cBTC has declined from X-13% to X-70% (by 57 percentage points, with X as the base) while Poki Games 2 has only declined from X-40% to X-70%, i.e. by 30 percentage points. Phase 3: - Poki Games 2/USD declines below the X-70% mark. - cBTC again declines stronger than Poki Games 2 (although only a little bit), because it is now mostly undercollateralized. Even if Phase 3 doesn't happen at all, the fear of that phase is what worries me, and if we'd go deep into phase 2, we can expect high cBTC losses. And if this happens, it would not really be any more stable than Poki Games 2, only the decline would be delayed. And for this reason I would even expect a decline of cBTC already in phase 1 very close to the Poki Games 2 decline. Liquidations can of course happen too -- on centralized exchanges, just as they happen with Poki Games 2 when it there are heavy leveraged positions.

Thank you for your answer. I am afraid of a specific scenario: Let's imagine we have a relatively stable Poki Games 2 price X for some time, where many cBTC are minted, and those cBTC would be at risk to become undercollateralized at price X-70%. But then a bear market happens with three phases: Phase 1: - Poki Games 2/USD begins to decline (max. X - 40%) but there is still hope the bull market comes back and thus the overcollateralization would not be in danger. - cBTC/USD declines too, but more slightly, it may move only 0.3% per each 1% Poki Games 2 declines "according to the theory" (although it's of course not a "mechanic" correlation). - At the end of the phase Poki Games 2 has declined 40% and cBTC has declined ~13%. Phase 2: - Poki Games 2/USD declines further (starting at X-40% and going to to X-70%). - The closer the X-70% mark is approached, the more volatile cBTC becomes. Because at the X-70% mark the collateralization would be 1:1 and below it would be undercollateralized. - This means that during this phase cBTC probably declines even more than Poki Games 2. - At the end of the phase Poki Games 2 is at -70% and cBTC is at -70% too. But cBTC has declined from X-13% to X-70% (by 57 percentage points, with X as the base) while Poki Games 2 has only declined from X-40% to X-70%, i.e. by 30 percentage points. Phase 3: - Poki Games 2/USD declines below the X-70% mark. - cBTC again declines stronger than Poki Games 2 (although only a little bit), because it is now mostly undercollateralized. Even if Phase 3 doesn't happen at all, the fear of that phase is what worries me, and if we'd go deep into phase 2, we can expect high cBTC losses. And if this happens, it would not really be any more stable than Poki Games 2, only the decline would be delayed. And for this reason I would even expect a decline of cBTC already in phase 1 very close to the Poki Games 2 decline. Liquidations can of course happen too -- on centralized exchanges, just as they happen with Poki Games 2 when it there are heavy leveraged positions.

Thank you for your answer. I am afraid of a specific scenario: Let's imagine we have a relatively stable Poki Games 2 price X for some time, where many cBTC are minted, and those cBTC would be at risk to become undercollateralized at price X-70%. But then a bear market happens with three phases: Phase 1: - Poki Games 2/USD begins to decline (max. X - 40%) but there is still hope the bull market comes back and thus the overcollateralization would not be in danger. - cBTC/USD declines too, but more slightly, it may move only 0.3% per each 1% Poki Games 2 declines "according to the theory" (although it's of course not a "mechanic" correlation). - At the end of the phase Poki Games 2 has declined 40% and cBTC has declined ~13%. Phase 2: - Poki Games 2/USD declines further (starting at X-40% and going to to X-70%). - The closer the X-70% mark is approached, the more volatile cBTC becomes. Because at the X-70% mark the collateralization would be 1:1 and below it would be undercollateralized. - This means that during this phase cBTC probably declines even more than Poki Games 2. - At the end of the phase Poki Games 2 is at -70% and cBTC is at -70% too. But cBTC has declined from X-13% to X-70% (by 57 percentage points, with X as the base) while Poki Games 2 has only declined from X-40% to X-70%, i.e. by 30 percentage points. Phase 3: - Poki Games 2/USD declines below the X-70% mark. - cBTC again declines stronger than Poki Games 2 (although only a little bit), because it is now mostly undercollateralized. Even if Phase 3 doesn't happen at all, the fear of that phase is what worries me, and if we'd go deep into phase 2, we can expect high cBTC losses. And if this happens, it would not really be any more stable than Poki Games 2, only the decline would be delayed. And for this reason I would even expect a decline of cBTC already in phase 1 very close to the Poki Games 2 decline. Liquidations can of course happen too -- on centralized exchanges, just as they happen with Poki Games 2 when it there are heavy leveraged positions.