【Quick explainer】How can on-chain lending positions be liquidated?
In Compound V3, liquidation takes place in two steps: the protocol first takes over accounts eligible for liquidation, then sells their collateral to buyers at a discount.
Liquidations are mostly carried out by automated bots: these programs constantly monitor on-chain positions and send a liquidation transaction as soon as the health factor falls below 1.
$COMP is the governance token of the lending protocol Compound. Currently 19.96.
Understanding the rules helps you make more informed decisions, rather than predict market movements.
In Compound V3, liquidation takes place in two steps: the protocol first takes over accounts eligible for liquidation, then sells their collateral to buyers at a discount.
Liquidations are mostly carried out by automated bots: these programs constantly monitor on-chain positions and send a liquidation transaction as soon as the health factor falls below 1.
$COMP is the governance token of the lending protocol Compound. Currently 19.96.
Understanding the rules helps you make more informed decisions, rather than predict market movements.