Comment by DebtDeflation
3 years ago
For every seller, there must be a buyer. With a defi "code is law" approach, if every contract automatically tries to execute a sell at the same time, the price will fall until there are enough matching buyers, and if there still aren't enough buyers when BTC hits $0.0000001 then the sell orders will just not execute. Smart contracts do not eliminate the problem of liquidity risk, they merely assume it away.
Yes. It seems not appreciated by some that price need not move continuously, but it can jump, and it can also go to zero (or if it cannot: no buyer can be found at the smallest possible positive price).