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ok going to move on from this topic after this but: 1) borrowing =!= shorting. Sometimes borrows are for liquidity, or yield farming, or collateral, etc. 2) obviously Alameda has automated systems to monitor and manage risk, it doesn't just passively say 'oops liquidated!'

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and

push the maker to buy back what was borrowed is the game

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one could also, you know, just send over more collateral :P

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and

collateralization ratios getting tight, must be confident in your systems. sending over the right collateral will likely move you out of a position and move the market.

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why would it move the market? what if it was sitting around somewhere in case it was needed?

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and

cause you’re a quant, you are not going to borrow something and pay interest unless can generate a better return. right just sitting in binance and bittrex that you pulled liquidity from to repay and market moved.

SBF

@SBF_FTX

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@cryptobeaker

OTOH -- it's *extremely* valuable to have spare capital: 1) if you don't you'll get blown out to moves 2) free to use for new things that come up generally you almost always want a bunch

2:32 AM · Oct 13, 2020Twitter Web App

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and

agreed but I would speculate that your spare capital is not sitting idle but on order books MM. when squeezed offside either have to take the market to get collateral hedged or pull liquidity allowing price to move easier.