Strike Finance is secured through the decentralized nature of its protocol and the mechanisms put in place to ensure the safety of users' funds. Here are some key aspects of how Strike Finance is secured:
Decentralization: Strike Finance operates as a decentralized finance (DeFi) platform, meaning it is not controlled by any single entity. Instead, it is governed by the community of token holders who participate in making decisions through a decentralized governance system.
Smart Contract Security: The core functionalities of Strike Finance, such as lending, borrowing, and governance, are implemented through smart contracts on the blockchain. These smart contracts undergo rigorous testing and auditing to ensure they are secure and free from vulnerabilities.
Collateralization: Borrowers on Strike Finance are required to deposit collateral in order to take out loans. The collateralization of loans helps mitigate the risk of default, as borrowers must maintain a certain level of collateral relative to the value of the loan.
Liquidation Mechanism: To further mitigate the risk of default, Strike Finance employs a liquidation mechanism that automatically liquidates a borrower's collateral if it falls below a certain threshold. This helps ensure that lenders are able to recoup their funds in the event of a borrower defaulting on a loan.
Community Governance: The governance of Strike Finance is decentralized, with decisions about the protocol being made by the community of token holders. This ensures that changes to the protocol are made in the best interests of the platform and its users.
Overall, Strike Finance employs a combination of decentralization, smart contract security, collateralization, liquidation mechanisms, and community governance to secure the platform and protect users' funds.
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