If the Loan-to-Value ratio reaches 83%, NFT collateral will be set to be liquidated and user will have ~24 hours to either repay back their loan or add more collateral to bring the LTV ratio below 83%.
What happens if the LTV is still above 83% after 24 hours?
The underwriting pool will purchase liquidated NFTs and USDC proceeds will be used to close borrower's loan.
Underwriters effectively become owners of the NFT collateral and can decide to stake NFTs in their native ecosystem to earn rewards or sold on the open market.