Liquidation&Auction

Factors

  • Current order: the value of borrowable assets / value of collateralized assets = collateralization factor;
  • Current order: the value of principal and interest outstanding/value of collateral = liquidation factor;
  • Current order: the value of collateral/value of principal and interest outstanding = risk factor.

Contract Execution

  • Current order liquidation factor >= 0.8 executes liquidation and the asset is transferred to the auction contract;
  • Current order risk factor <= 1.03 executes automatic selling.

Margin of premium

The value of the liquidated assets will always be higher than the outstanding principal and interest, at a premium of approximately 20%;
Uncollected Fees are not calculated at the time of liquidation. The longer the asset is collateralized, the higher the portion of the gain.

Parameter modification

Parameters of each factor, such as collateral, liquidation, etc., can be updated through governance.