The current maximum bonus takes effect immediately when it falls below 1—there is no Dutch auction here where the price gradually declines and the bonus slowly ramps up.
Many DeFi liquidations use discounts that change over time or with health status, so users might assume that just after the liquidation threshold is crossed, the bonus is still relatively small. The official parameter @BabylonLabs_io is explicit: on the current testnet, healthFactorForMaxBonus is approximately 1.0, so once a Position becomes liquidatable, the maximum 10% bonus can apply immediately, with no Dutch-auction-style gradual amplification. The risk in Trustless Bitcoin Vaults (TBV) jumps at the threshold rather than slowly creeping upward.
This jump increases the incentive for liquidators to act immediately, and it also reduces the time for a position to worsen further into bad debt. The trade-off is that users can’t expect a “mild” phase right after crossing the line. Also consider that UTXOs are indivisible: a single small price movement may simultaneously trigger the full bonus amount and a complete Vault movement. #baby
If the frontend only uses color gradients to convey risk, users may mistakenly believe that losses will also increase smoothly. I’d rather have the page, before borrowing, directly show: once it crosses 1.0, the full bonus and the next entire Vault may enter the calculation at the same time. Discrete consequences must be communicated with discrete warnings. $BABY
Therefore, I won’t treat 1.0 as a reminder line; I’ll treat it as an execution line that is already too late. Real warnings should be set at a higher health factor, with Repay assets prepared in advance.
Many DeFi liquidations use discounts that change over time or with health status, so users might assume that just after the liquidation threshold is crossed, the bonus is still relatively small. The official parameter @BabylonLabs_io is explicit: on the current testnet, healthFactorForMaxBonus is approximately 1.0, so once a Position becomes liquidatable, the maximum 10% bonus can apply immediately, with no Dutch-auction-style gradual amplification. The risk in Trustless Bitcoin Vaults (TBV) jumps at the threshold rather than slowly creeping upward.
This jump increases the incentive for liquidators to act immediately, and it also reduces the time for a position to worsen further into bad debt. The trade-off is that users can’t expect a “mild” phase right after crossing the line. Also consider that UTXOs are indivisible: a single small price movement may simultaneously trigger the full bonus amount and a complete Vault movement. #baby
If the frontend only uses color gradients to convey risk, users may mistakenly believe that losses will also increase smoothly. I’d rather have the page, before borrowing, directly show: once it crosses 1.0, the full bonus and the next entire Vault may enter the calculation at the same time. Discrete consequences must be communicated with discrete warnings. $BABY
Therefore, I won’t treat 1.0 as a reminder line; I’ll treat it as an execution line that is already too late. Real warnings should be set at a higher health factor, with Repay assets prepared in advance.