🗂️ DeFi｜On-chain Liquidations
· What it is: Using Aave as an example, when a position’s health factor falls below 1, anyone can act as a liquidator and initiate liquidation.
· How to understand it: Liquidations are generally carried out by automated programs. They continuously monitor on-chain positions and immediately send a liquidation transaction as soon as the health factor drops below 1.
· Reminder: Repaying your loan or adding collateral yourself is usually cheaper than waiting to be liquidated, since liquidation incurs an additional penalty.
$COMP 20.41（-0.58%）
· What it is: Using Aave as an example, when a position’s health factor falls below 1, anyone can act as a liquidator and initiate liquidation.
· How to understand it: Liquidations are generally carried out by automated programs. They continuously monitor on-chain positions and immediately send a liquidation transaction as soon as the health factor drops below 1.
· Reminder: Repaying your loan or adding collateral yourself is usually cheaper than waiting to be liquidated, since liquidation incurs an additional penalty.
$COMP 20.41（-0.58%）