DeFi | How can on-chain loans be liquidated?
By default, a single liquidation on Aave V3 can repay at most half of a position’s debt. If the health factor falls below 0.95, or the position has very little collateral or debt, the entire debt can be liquidated at once.
Most liquidations are carried out by off-chain bots. These programs continuously monitor on-chain positions and submit a liquidation transaction as soon as the health factor drops below 1.
$COMP is the governance token of the lending protocol Compound.
Don’t invest borrowed money—being in that mindset can lead you to make poor decisions.
By default, a single liquidation on Aave V3 can repay at most half of a position’s debt. If the health factor falls below 0.95, or the position has very little collateral or debt, the entire debt can be liquidated at once.
Most liquidations are carried out by off-chain bots. These programs continuously monitor on-chain positions and submit a liquidation transaction as soon as the health factor drops below 1.
$COMP is the governance token of the lending protocol Compound.
Don’t invest borrowed money—being in that mindset can lead you to make poor decisions.