Liquidation

Intro

When the health factor of an account approaches 1, the system will activate the liquidation process in order to control the risk. This means that the collateral portion of the account will be liquidated to restore the overcollateralization status.

Note:

• The liquidation will be partial, not a one-time liquidation of all collateral in the account.

• The liquidation process will stop when the account health factor is restored to a healthy state after liquidation.

• To avoid liquidation, you can deposit assets to replenish your collateral or pay off your borrowing in advance to ensure that your account is in a healthy state.

Health Factor Threshold and Status Description

• 0.0~1.0: The current account is not over-collateralized and will be liquidated immediately until the health factor is restored to 1 or higher.

• 1.0~1.5: Your account is currently collateralized close to the liquidation threshold and may trigger liquidation after market fluctuations. It is recommended to repay part of the borrowing or add collateral to avoid liquidation risk.

• >1.5: Your account is fully over-collateralized and will not trigger liquidation.