Liquidations

What is liquidation?

Liquidation is the process of terminating a borrower's account when their Health factor goes below 100%, and their collateral value does not fully cover their loan value. This might occur when the collateral decreases in value or the loan debt increases in value against each other. You can learn more about how the Health factor is calculated lower on the page, in the Health factor part.

Liquidation reasons:

• All assets are calculated in USD value and called collateral and borrowing principal balances (using Price Oracles);

• Minimum C-Ratio - depends on the collateral type and market situation. The borrow can not be more than the collateral value multiplied by C-Ratio parameter for particular asset (C parameter, for stables it is 95% and for example ETH/WETH/BTC/WBTC - it is 70%:

• Current C-Ratio - ratio between collateral principal balance and borrowing principal balance (can be 300% or 125%);

• Liquidation threshold = 95% (if the borrowed asset principal balance exceeds 95% of the collateral principal balance - liquidation happens):

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• Health Factor - Sum of Collateralized Assets per their prices multiplied by liquidation threshold 0.95 and divided by the sum of all Borrowed Assets per their prices:​

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