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