LIQUIDATIONS
When a borrower's Health Factor falls below 1.0, anyone can liquidate their position to earn a bonus.
Open Liquidations
AgentLoan uses open liquidations — any wallet can liquidate any undercollateralized position. Liquidators are incentivized by a liquidation bonus on the collateral they receive.
HOW IT WORKS
When Health Factor < 1.0, a liquidator can repay up to 50% of the borrower's debt (close factor) and receive collateral in return at a discount.
Collateral seized = debtRepaid × liquidationBonus / collateralPrice
Example (xclrBTC bonus = 5%):
Repay $1,000 xUSDC debt
Receive $1,050 worth of xclrBTC
→ $50 profit for the liquidator
| Asset | Liquidation Threshold | Liquidation Bonus |
|---|---|---|
| xUSDC | 85% | +5% |
| xEURC | 85% | +5% |
| xclrBTC | 75% | +5% |
HOW TO AVOID LIQUIDATION
REPAY DEBT
Reduces denominator of HF formula
ADD MORE COLLATERAL
Increases numerator of HF formula
SET HF TARGET > 1.5
Buffer against price moves
MONITOR REGULARLY
Especially in volatile markets
⚠ AgentLoan uses mock oracle prices on testnet (BTC = $60,000 fixed). On mainnet with real Pyth Network feeds, collateral prices fluctuate and liquidation risk is real. Always maintain a safe Health Factor buffer.