📊 DeFi | On-chain Liquidations
· Key point: Taking Aave as an example, when a borrow position’s health factor falls below 1, any address can initiate a liquidation as a liquidator.
· How it works: Being liquidated generally doesn’t mean all the collateral is wiped out: the borrower still keeps the assets they borrowed; what is taken is the portion of collateral used to repay the debt, plus the liquidation penalty.
· Reminder: You can use wallet tools to set health factor alerts so you don’t find out only after a liquidation occurs.
$COMP 18.33 (-3.32%)
· Key point: Taking Aave as an example, when a borrow position’s health factor falls below 1, any address can initiate a liquidation as a liquidator.
· How it works: Being liquidated generally doesn’t mean all the collateral is wiped out: the borrower still keeps the assets they borrowed; what is taken is the portion of collateral used to repay the debt, plus the liquidation penalty.
· Reminder: You can use wallet tools to set health factor alerts so you don’t find out only after a liquidation occurs.
$COMP 18.33 (-3.32%)