Before you borrow, know the math…

Seeing lots about borrowing, know what you’re doing.

You have 50 BTC. The price is $100k. It’s worth $5M and you want to borrow against it. The lender requires twice the collateral if the loan.

You want to borrow $2M, so you put up 40 bitcoin to cover $4M. You no longer solely control this bitcoin. You get $2M.

The price drops to $90k. Your 40 bitcoin is now only worth $3.6M. You have to put up another $400k to maintain the 2:1 collateral, and your 10 remaining bitcoin is now worth $900k. You round up and put up another 5 bitcoin to have 45 bitcoin worth $4.05M as collateral.

The price drops to $80k. Your 45 bitcoin is now worth $3.6M again. You get your call. You have 5 bitcoin left worth $400k. You are now at your entire 50 bitcoin covering your $2M loan.

The price drops to $79k. You get liquidated.

Edit: I was corrected: they sell your bitcoin at liquidation and you are forced to sell around 28 bitcoin at $79k each to cover your loan and interest unless you keep funding more. You’re left with 22 bitcoin worth $1.7M and whatever you did with the $2M.