So, - they use WLFI as collateral - borrow stables against it to fund the yield - if WLFI goes lower, they can release more treasury WLFI into circulation So the system defends itself by weakening its own collateral. That’s how you create a reflexive spiral: WLFI down -> collateral weaker -> more dilution -> more sell pressure -> WLFI down again It's almost the same what LUNA did... The structure starts relying on expanding supply of a falling asset to keep itself alive. At current size, this probably isn’t a problem. But if the pool gets much larger over time, I only see this ending badly. @worldlibertyfi, pls correct me if I misunderstood something or got anything wrong.(𝗰𝘆𝗰𝗹𝗼𝗽)