Limit Orders as Risk Management Tool for Borrowers

General
1

Giving borrowers more risk management tools could really help with borrow demand. What if there was a way to have an on-chain limit order to buy LUNA, and when the limit order fills it automatically converts to bLUNA and adds it to the users collateral?

Example:
The user has $50,000 of LUNA trading at $6. They take out a loan at 25% LTV, giving them a liquidation price of $3. With the loan proceeds they deposit the UST into a limit order smart contract that buys LUNA at $3.50 and automatically converts it into bLUNA and adds it to the collateral pool. This means that when LUNA dips in price they are automatically buying the dip and increasing their collateral. Even if the Anchor UI was down, users that have large enough limit orders can automatically be safe. These types of borrowers would also slow down price falls because they are buying dips rather than being forced to sell them.

Is this possible from technical perspective? Any thoughts here?

2

I’m not understanding this. We already have tools that automatically uses aUST to paydown loans when they get close to liquidation.

Why would you want to add collateral automatically instead of paying down the loan itself?