Q: How does Lending and Borrowing pools work?

I’m trying to understand how borrowing and lending pools work on platforms like AAVE. If I lend money to the pool and someone borrows that money but I later take my money back, what happens?

Basically what happens when there’s low liquidity (lenders removing liquidity) and there’s outstanding loans??

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1 thought on “Q: How does Lending and Borrowing pools work?”

  1. If every token is lent out you obviously can’t withdraw, you have to wait till someone pays back to gets liquidated.

    Given that it’s over collateralized, it can only happen to certain pools and others will have the collateral of that debt


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