How the actual fuck do crypto lenders go bankrupt?

So I'm really tired of hearing about crypto lenders going bankrupt. Celsius, 3 Arrows, Blockfi, FTX, and now Genesis is on the brink. It makes zero sense, lending is literally the easiest way to make money.

Now, I've dabbled in DeFi. I've also gotten loans from banks. In traditional finance, whenever the loan was greater than 1 month's salary, I had to collateralize it. In DeFi, it's always collateralized. When the value of the collateral reaches a certain threshold, you get liquidated/margin called. The ensures the lender doesn't lose money.

Now typically, the collateral value is greater than the loan value. The lender will likely profit when you get liquidated. Additionally, the lender gains a yield from the interest of the loan. And even more, they can earn a spread on your deposits- they can offer a 4% USDC deposit rate, but lend USDC out at 6% and make the easiest 2% ever.

Literally all crypto lenders need to do to not go bankrupt is to liquidate positions or perform margin calls when they approach being upside down. It takes like, 2-3 people who know how to code to automate this function. There's github repos that have the shit already coded, just need to make a few tweaks.

Yet somehow, these degenerates still figure out a way to completely fuck it up. The only two explanations are they are literally running a Bernie Madoff ponzi and running off with customer funds the second they are deposited, or they are giving out massive uncollateralized loans.

So, if you're hell bent on earning a yield through lending (only for the experienced and high risk takers), PLEASE do it through a DeFi protocol that is set up to not be completely degenerate with your funds. *WARNING- The protocol can still be hacked and you lose everything. Beware*

​

TL;DR- Crypto lenders have millions of ways to make money and prevent losses. All the bankrupt companies literally just decided to steal money or had the dumbest business practices ever.