Preventing liquidation is a USER's responsibility. Make sure to regularly monitor your Health Factor and Liquidation Price to avoid liquidation.

What is Liquidation risk?

Liquidation is where a borrower's collateral is seized and sold to repay their outstanding loan. This mitigates bad debt from occurring due to under-collateralization.

Borrowers must maintain a Health Factor greater than 0%. If the value of your collateral decreases or the value of your loan increases, your HF will worsen and may cause you to be liquidated.

What precautions has Silo taken to prevent this?

Health Factor

A borrower's Health Factor is clearly indicated on the Silo UI.

Additionally, if a user attempts to withdraw collateral or borrow more, its impact on the Health Factor will be simulated.

Liquidation Price

The liquidation price of a borrower's position is also clearly indicated on the UI.

This is the price for that asset at which a user may be liquidated.

Note that if a user has a volatile-volatile position (e.g. $ETH to borrow $DPX), the liquidation price will change as both collateral and loan assets will fluctuate in price.

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