110% collateral ratio

In a lending system, when the value of the collateral falls below a certain threshold that collateral must be liquidated to pay the debt borrowed against it so the system remains solvent. Some systems or lenders (centralized or decentralized) liquidate the position by selling the collateral at a discounted price or through a potentially lengthy auction process requiring a collateral ratio much higher than 110% - such as 150% or in some cases 200% to allow a buffer for the inefficiencies of the liquidation process. Money Protocol, however, applies a 2-step liquidation mechanism that allows for an instant liquidation of undercollateralized positions without needing to find a buyer on the spot. This novel design maintains stability and relies on aggregate collateralization rather than individual positions enabling Money Protocol to allow borrowers to borrow up to 110% collateralization ratio. This makes Money Protocol a capital-efficient yet safe lending system in comparison to other lending options.