[nahollander]

The collateral is held in a smart contract -- if the borrower disappears and fails to make a repayment, his collateral becomes eligible for seizure.

[iMuzz]

Are the collaterals always worth equal or more than the amount borrowed?

I asked that assuming people put up 1 eth as collateral to borrow 2 eth.

[cortesoft]

Usually collateral is supposed to be equal or more than the amount borrowed, especially in a situation like this where there is no 'credit score' to use to determine likelihood of default.

[ghthor]

The protocol doesn't have a credit score. That's a concept better suited for the application layer built on top.

[cortesoft]

Right, which was why my point was that the collateral is probably going to be at least equal in value to whatever is borrowed.

[bpforster24]

Dharma Protocol doesn't require that the value of collateral be greater than the principal of the loan, but we do expect the market will demand full- or over-collateralization.