【One-Minute Explainer】Why can on-chain loans be liquidated?
In Compound V3, liquidation happens in two steps: the protocol first takes over accounts that meet the liquidation criteria, then sells their collateral to buyers at a discount.
Liquidators are rewarded to incentivize off-chain liquidators to promptly liquidate risky positions and prevent bad debt from accumulating in the protocol.
$COMP is the governance token of the lending protocol Compound.
Be wary of claims promising high, stable returns.
#COMP
In Compound V3, liquidation happens in two steps: the protocol first takes over accounts that meet the liquidation criteria, then sells their collateral to buyers at a discount.
Liquidators are rewarded to incentivize off-chain liquidators to promptly liquidate risky positions and prevent bad debt from accumulating in the protocol.
$COMP is the governance token of the lending protocol Compound.
Be wary of claims promising high, stable returns.
#COMP