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![CoinbaseDev Avatar](https://lunarcrush.com/gi/w:24/cr:twitter::1374418187047952399.png) Coinbase Developer Platform🛡️ [@CoinbaseDev](/creator/twitter/CoinbaseDev) on x 45.5K followers
Created: 2025-07-17 19:20:51 UTC

So how does Moonwell ensure onchain loans are repaid, without loan officers, even if someone defaults?

When a loan goes underwater, liquidators step in to repay part of the loan and claim a portion of the collateral, earning a X% bonus, while X% goes to protocol reserves.

This can be rough for the borrower, but crucial for protocol health. No bad debt, no bailout needed.

![](https://pbs.twimg.com/amplify_video_thumb/1945926354459131904/img/bCaXGnZl4Qk8ARW9.jpg)

XXX engagements

![Engagements Line Chart](https://lunarcrush.com/gi/w:600/p:tweet::1945926691781767423/c:line.svg)

**Related Topics**
[debt](/topic/debt)
[default risk](/topic/default-risk)
[protocol](/topic/protocol)
[onchain](/topic/onchain)
[coinbase](/topic/coinbase)
[stocks financial services](/topic/stocks-financial-services)
[stocks bitcoin treasuries](/topic/stocks-bitcoin-treasuries)

[Post Link](https://x.com/CoinbaseDev/status/1945926691781767423)