Why do on-chain loans get liquidated? Many people can’t answer!
If collateral prices plunge and liquidation isn’t completed in time, the remaining collateral may not be enough to repay the debt, leaving the protocol with bad debt.
Liquidations are generally carried out by off-chain bots: they constantly monitor on-chain positions and submit a liquidation transaction as soon as the health factor falls below 1.
If you don’t understand something, don’t take a large position in it yet. Practicing with a small amount is safer.
$COMP 25.23（-2.92%）
If collateral prices plunge and liquidation isn’t completed in time, the remaining collateral may not be enough to repay the debt, leaving the protocol with bad debt.
Liquidations are generally carried out by off-chain bots: they constantly monitor on-chain positions and submit a liquidation transaction as soon as the health factor falls below 1.
If you don’t understand something, don’t take a large position in it yet. Practicing with a small amount is safer.
$COMP 25.23（-2.92%）