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  • 🌟YAI Brief Overview
  • πŸ› οΈYAI
  • πŸ’»Using YAI
  • πŸ›‘οΈ Collateralized Debt Positions (CDPs)
  • 🏦σ €₯Interest
  • πŸ’§CDP Liquid Staking
  • 🏊 Stability Pools
  • πŸ’± Redemptions
  • 🚨 Liquidations
  • πŸ’² iAssets
  • 🌱 Governance & YAI Staking
  • πŸ—³οΈ How To Vote
  • πŸ“Š Tokenomics
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  • Overview 🌐
  • Liquidation Process βš™οΈ
  • Incentive to Liquidate πŸ“ˆ

🚨 Liquidations

Overview 🌐

Understanding Liquidations

  • Liquidations occur when Collateralized Debt Positions (CDPs) become undercollateralized. This process ensures the stability and solvency of the protocol.

Liquidation Process βš™οΈ

Two-Step Procedure: Liquidations in the Rosyn AI are automated by bots but the actual two-step process is as follows.

  • Freeze the CDP: Once frozen, the CDP is inaccessible to its former owner, who forfeits all access and rights to it.

  • Liquidate the CDP: The CDP's debt is settled by burning iAssets from a Stability Pool, and its collateral is proportionally distributed to Stability Pool stakers.

Incentive to Liquidate πŸ“ˆ

  • Stability Pool stakers are motivated to take part in Stability Pool to liquidate CDPs as they can earn a share of the CDP's collateral. Typically, the value of the earned collateral may exceed the value of the canceled debt, especially when a liquidated CDP has a collateral value above 100% of the iAsset value.

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Last updated 10 days ago