Managing Liquidations

1. Monitoring and Assessing Borrower Health

Our platform continuously monitors borrower health, evaluating factors such as collateral value, loan-to-value (LTV) ratios, and repayment history. By keeping a close eye on these indicators, we can identify potential risks early and take necessary actions to protect both borrowers and lenders from unfavorable outcomes.

2. Implementing Early Warning Systems and Automated Actions

We utilize early warning systems to detect when a borrower's collateral value approaches the liquidation threshold. In such cases, the platform can automatically notify borrowers, giving them the opportunity to either repay part of the loan or provide additional collateral to avoid liquidation. This proactive approach helps maintain borrower confidence and minimizes losses for all parties involved.
📢 Important Note: Timely notifications and automated actions help borrowers avoid unwanted liquidation events.

3. Fair and Transparent Liquidation Process

In the event of a borrower default or collateral value dropping below the liquidation threshold, our platform initiates a fair and transparent liquidation process. The platform's smart contracts handle the liquidation process, ensuring that the borrower's collateral is sold at the best possible price to minimize losses. This clear and standardized process protects lenders, borrowers, and the overall stability of the lending ecosystem.

Key Features of the Liquidation Process:

  • Automatic initiation by smart contracts
  • Best possible price for liquidated collateral
  • Transparent and auditable process for all parties involved
  • Protection for lenders, borrowers, and the lending ecosystem
Last modified 2mo ago