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That’s true if there’s faith it comes back up from $.90.

If it starts falling to $.99 then $.98 then $.95 then $.90.. you have to decide if it’s really a dip or the end.

If you really believed that Dai was on a crash course to $0, you would be very wise to buy ASAP to pay your dai debts and retrieve your collateral before the crash in Dai crashed Ethereum in tandem causing you to get liquidated.

Not really. The point is: there's always someone who has a debt in DAI they need to pay off. If they thought the dip would go even further , they would wait longer, because to them, the DAI does have value: it is what they need to get their hands on to get their collateral back.

What if they think DAI is going to go to $0?

Sure, if more people who hold DAI thought it would than it wouldn’t, it would be a problem. At this point there are so many arbitrage bots and protocols on top that it won’t even budge to 0.95 though, because this incentive balance has proven to be solid. The main downside really is that it’s overcollateralized by assets in 2x or so value.

Then they would be able to get their ethereum collateral back for free

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