Great question. I don't know the answer since the mechanics BTS has not been released yet. Here's my best guess.
You submit $1000 worth of xPolyCUB today as collateral. You get a $500 value loan in USDC. Once that loan (plus interest) is paid off with your xPolyCUBs, you will get $1000 worth of xPolyCUBs back. Now obviously the number of xPCs would reduce since some of them will be used to repay the loan. But the $ value of your principal will remain the same.
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