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Liquidation bot

Learn how to cover the debt of under-collateralised positions.

You can use the Balanced smart contracts to liquidate a borrower’s collateral when their loan-to-value ratio exceeds 85%.

There are 2 ways to profit from liquidation events:

  1. Trigger a liquidation by calling the liquidate method.
  2. Pay off bad debt by calling the returnAsset method and set repay to FALSE.

Liquidators earn a 4% fee for each liquidation, and the DAO Fund earns 1%.

Balanced uses a “soft” liquidation approach, which means liquidation will stop once the borrower’s LTV is below the 85% threshold. To prevent small positions, you can fully liquidate a borrower’s collateral if their debt is below the minimum threshold of $100.

The example liquidation bot includes two ways you can liquidate borrowers. For testnet details and a place to ask questions, view Balanced soft liquidation bots on the forum.