Liquidations
The health of the Augmented Finance protocol depends on the 'health' of the loans within the system, also known as the 'health factor'. Your 'health factor' can be found at the top of the Dashboard.
When the 'health factor' of an account's total loans is below '1', liquidator can make a liquidation to the
LendingPool contract, paying back part of the debt owed and receiving discounted collateral in return (also known as the liquidation bonus).
This incentivizes third parties to participate in the health of the overall protocol, by acting in their own interest (to receive the liquidation bonus) and as a result, ensuring loans are sufficiently collateralized. Anybody can liquidate a loan (borrow) position if the 'Heath factor' drops below '1'. If you want more information on how to perform liquidation on Augmented Finance, please follow our Github for the guide.
Last modified 7mo ago