Who actually carries out liquidations, and how do liquidators make money?
Repaying your debt or adding collateral yourself generally results in smaller losses than waiting to be liquidated, because liquidation incurs an additional penalty.
Put simply, liquidations are mostly carried out by automated programs. These programs constantly monitor on-chain positions and immediately submit a liquidation transaction as soon as the health factor falls below 1.
$COMP is the governance token of the lending protocol Compound.
#COMP
Repaying your debt or adding collateral yourself generally results in smaller losses than waiting to be liquidated, because liquidation incurs an additional penalty.
Put simply, liquidations are mostly carried out by automated programs. These programs constantly monitor on-chain positions and immediately submit a liquidation transaction as soon as the health factor falls below 1.
$COMP is the governance token of the lending protocol Compound.
#COMP