BTC would have to drop 70% before my own position gets touched.
I figured liquidation risk was some abstract thing you'd only think about mid crash. pulled up my own actual testnet position and the number was just sitting there, waiting
$630 collateral, $145 borrowed, liquidation price $18,677. current BTC price when I checked, $63,013. that's a 70.4% drop before my specific position gets touched, today, at these exact numbers. that threshold isn't some fixed universal thing. it comes from my own collateral, my own debt, and whatever risk parameters the protocol has set. someone with a different loan size would see a completely different buffer. health factor 3.37, comfortably safe, today
here's what i .. didn't expect. from what I understand, that's where the debt side and the Bitcoin side split apart. a liquidator repays my debt and gets the right to the collateral, settling everything at Ethereum speed. the actual native BTC underneath is A separate matter entirely. it gets redeemed later, on Bitcoin's own slower timeline, through a different process
so the fast thing that settles my debt and the slow thing that t0uches my actual Bitcoin aren't the same event. they're not even the same person acting. I own the position and I still wouldn't be the one closing the loop on my own liquidation. someone else would, later, on a clock I don't control
backwards part, this whole system exists to keep BTC native and untouched, yet the fastest response to my liquidation still appears to route through WBTC before my actual Bitcoin is ever redeemed
what I'm actually unsure about now is how much that 70.4% buffer shifts over time as interest accrues on my debt, since that's what would actually move my liquidation price, not the pool's utilization directly
@BabylonLabs_io $BABY #baby
I figured liquidation risk was some abstract thing you'd only think about mid crash. pulled up my own actual testnet position and the number was just sitting there, waiting
$630 collateral, $145 borrowed, liquidation price $18,677. current BTC price when I checked, $63,013. that's a 70.4% drop before my specific position gets touched, today, at these exact numbers. that threshold isn't some fixed universal thing. it comes from my own collateral, my own debt, and whatever risk parameters the protocol has set. someone with a different loan size would see a completely different buffer. health factor 3.37, comfortably safe, today
here's what i .. didn't expect. from what I understand, that's where the debt side and the Bitcoin side split apart. a liquidator repays my debt and gets the right to the collateral, settling everything at Ethereum speed. the actual native BTC underneath is A separate matter entirely. it gets redeemed later, on Bitcoin's own slower timeline, through a different process
so the fast thing that settles my debt and the slow thing that t0uches my actual Bitcoin aren't the same event. they're not even the same person acting. I own the position and I still wouldn't be the one closing the loop on my own liquidation. someone else would, later, on a clock I don't control
backwards part, this whole system exists to keep BTC native and untouched, yet the fastest response to my liquidation still appears to route through WBTC before my actual Bitcoin is ever redeemed
what I'm actually unsure about now is how much that 70.4% buffer shifts over time as interest accrues on my debt, since that's what would actually move my liquidation price, not the pool's utilization directly
@BabylonLabs_io $BABY #baby