RE: LeoThread 2026-05-07 20-01

3/7 🧵
Margin calls: don’t make them discretionary.

Example rule:

If collateral falls below 170%, borrower gets a margin notice and has 72 hours to either:

1. add collateral,
2. repay part of the loan, or
3. accept partial collateral liquidation/power-down.

If it falls below 150%, liquidation begins automatically. Aave’s model is useful here: liquidation occurs when the borrower’s health factor drops below 1, meaning collateral no longer safely covers debt: Aave liquidations.