Vitalik Buterin Challenges DeFi Liquidations With Options-Based Proposal
Ethereum co-founder Vitalik Buterin has come up with a new framework that has the potential to change how decentralized finance handles market downturns. In a recently published research paper, Buterin argued that DeFi liquidations which is the automatic process that closes down undercollateralized positions, shouldn’t be the default way to protect lending protocols. Instead, he outlined a system based on options that is designed to get rid of forced liquidations altogether and cut reliance on real-time price feeds.