How can an on-chain loan be liquidated?
Take Aave, for example: once a position’s health factor falls below 1, any address can act as a liquidator and initiate liquidation.
Lending protocols use oracle-provided prices to assess positions. Aave, for example, mainly uses price data from Chainlink.
The key thing to keep in mind when managing funds: proactively repaying debt or adding collateral usually results in smaller losses than waiting to be liquidated, since liquidation incurs an additional penalty.
$COMP 23.43（-6.47%）
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Take Aave, for example: once a position’s health factor falls below 1, any address can act as a liquidator and initiate liquidation.
Lending protocols use oracle-provided prices to assess positions. Aave, for example, mainly uses price data from Chainlink.
The key thing to keep in mind when managing funds: proactively repaying debt or adding collateral usually results in smaller losses than waiting to be liquidated, since liquidation incurs an additional penalty.
$COMP 23.43（-6.47%）
#COMP