# Lido Develops Fallback Exits to Let Lenders Use Borrower Collateral By Simon Yoon Canonical URL: https://www.tokenpost.com/news/technology/33613 Published: 2026-10-17T00:50:55.000Z Updated: 2026-10-17T00:50:55.000Z Section: Technology > The feature would prioritize borrowers nearest the liquidation loan-to-value threshold and reduce their outstanding debt as collateral is used. Lido is developing Fallback Exits for Lido Lend, a feature that would let lenders use borrower collateral to cover part or all of a withdrawal when an isolated market lacks enough of the requested asset. When the feature is used, collateral would be taken first from borrowers whose positions are closest to the liquidation loan-to-value (LLTV) threshold. Their outstanding debt would be reduced by a corresponding amount. Lido Lend is built on a modified version of Morpho Blue and uses isolated markets pairing related assets, such as wrapped Ether (wETH) with wrapped staked Ether (wstETH), or U.S. dollars with U.S. Treasury real-world assets. The feature is part of [Lido’s earlier plan for a specialized lending market](). Technical specifications and market parameters are expected within two weeks of Oct. 16. A mainnet launch is planned after the DAO governance process is complete. ## Links in this article - [Lido’s earlier plan for a specialized lending market](https://www.tokenpost.com/news/technology/27954)