🔁Liquidation Flow

  • Detection – The borrower’s Health Factor ≤ 1.0 triggers risk.

  • Trigger – A liquidator calls the liquidation function in the smart contract.

  • Repayment – The liquidator repays a portion of the borrower’s outstanding debt (up to the Close Factor).

  • Collateral Seizure – The liquidator receives discounted collateral (based on the Liquidation Bonus).

  • Post-Liquidation – The borrower’s position is partially stabilized. If the Health Factor remains ≤ 1.0, further liquidations may occur.

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