Position Health & Liquidations

Position health can be monitored on the Positions page. The collateralization ratio is on a per-market basis, meaning multiple positions on a specific market share collateral.

Loan Health

Fixed-rate loans use a collateralization ratio (collateral / debt) to measure risk. If the collateralization ratio drops below the liquidation threshold (i.e. 130%), all fixed-rate positions owned by that borrower for that market become eligible for liquidation.

Positions are liquidated one at a time, and the liquidation threshold may rise back above the liquidation threshold if the liquidation is not unprofitable, giving the user another chance to supply more collateral.

Overdue Loans

Loans not paid back by the due date also become eligible for liquidation. However, a smaller penalty is applied, assuming the loan remains well-collateralized.