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Liquidations
Liquidation can occur when the Health Factor falls below 1. The collateral is locked in a smart contract, and the liquidator takes the loan value + interest. An additional 2.5% is imbursed as a commission fee. The remaining collateral is left to claim by the borrower. The liquidation penalty helps maintain stability and security in the system by ensuring loans are adequately collateralized.
Last modified 10d ago