Liquidations
On the Liquidations page, the user can mark loans for liquidation and eventually liquidate them.
Last updated
On the Liquidations page, the user can mark loans for liquidation and eventually liquidate them.
Last updated
When open loans become a liability for the STAB protocol, due to their collateral value being too low (CR < MCR), they become eligible for liquidation: someone pays off their debt in return for a share of their collateral. For a loan to be liquidated, it first needs to be marked. Then, after a delay of 5 minutes, it can be liquidated by the marker. If the marker decides not to liquidate it, 10 minutes after the initial marking, anyone can liquidate it. See the for liquidation penalties.
The liquidation process consists of two steps:
Step 1: Marking for liquidation To start the liquidation process, eligible loans need to be marked. The user can select how many loans they wish to mark [1]. The "Mark loans" widget of the interface then automatically checks whether this amount of loans is actually markable. If they are, the user can decide to mark them in return for a Marker Receipt.
Step 2: Liquidating Option 1: Liquidating with marker Under the "With marker" selector [1], by selecting a Marker Receipt [2], the state of a corresponding marked loan can be checked [3]. If the the user so desires and it is possible, they can then liquidate the corresponding loan by clicking the "Liquidate" button. Sometimes, a marker has expired. The user can then decide to burn it, as it has no further use.
Option 2: Liquidating without marker Sometimes the marker of a loan does not have sufficient funds to liquidate a loan, or simply forgets about it. So, after a 10 minute delay, marked loans are liquidatable by everyone. Users can do so by selecting the "Without marker" selector [1].
The loan shown to the user will be the loan that has been marked for the longest amount of time. If there are multiple loans available for public liquidation, the user can choose to skip liquidating certain loans [2]. Information about the loan currently selected to be liquidated is shown on the bottom of the widget [3]. If these terms seem acceptable, the user can decide to liquidate the loan.
