Liquidation

Flow

Liquidation may occur when the user's supplied collaterals are not sufficient to maintain the coverage ratio over his debts (e.g. LTV%). Refer to Health factor and liquidation for more insight.

1. The indexer will collect the events from the core contract and prices from Band Protocol's on-chain price feeds contract.
2. A liquidator program will be monitoring and detecting accounts not meeting the debt coverage ratio (accounts subject to risk of being liquidated, or "to-be-liquidated") by querying data from the indexer.

3. Upon detecting the "to-be-liquidated" accounts, the liquidator account will send a liquidation transaction to the Strobe core contract.

4. Sometimes, the liquidator account may not have sufficient balance of specific token to run the liquidation. In such scenario, the liquidator account will execute a swap through XRPL DEX, Squid Router, or any other DEXs to obtain the desired borrowed assets to liquidate the debts.

For more on liquidation mechanics, please refer to Health factor and liquidation.