Liquidations

With the ability to calculate APYs for depositors and borrowers, the blueprint gives value to Depositors and Borrowers. Next, let's focus on Pool protection in the form of liquidations and additional risk management.

Liquidations are governed through the following params and cover 3 scenarios described in this chapter.

Liquidation Params

// Max Percent of the user debt that could be liquidated
max_liquidation_percents: HashMap<ResourceAddress, Decimal>,
// Liquidation bonus for the user
liquidation_bonuses: HashMap<ResourceAddress, Decimal>,
// Liquidation bonus for the protocol
liquidation_reserve_factors: HashMap<ResourceAddress, Decimal>,
// Minimum reasonable value to be liquidated
min_liquidable_values: HashMap<ResourceAddress, Decimal>,

Max Liquidation Percent

The % of the user position that could be liquidated. Configurable per pool. [0-1] Typically 0.5

Liquidation Bonus

The reward for the liquidation provider. Configurable per pool, [0-1] Typically 0.5

Liquidation Reserve Factor

The reward for the Blueprint. Configurable per pool, [0-1] Typically 0.5

Min Liquidable Value

When the cost of running the liquidation exceeds the potential reward, the exception is made and the whole position could be liquidated max_liquidation_percent = 1.

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