Liquidations

The Health Factor and Liquidation process on JUICE Finance play a critical role in safeguarding user accounts and maintaining financial stability within the platform. Here's a comprehensive overview of these essential components:

Health Factor

The Manager employs a cross-margin approach to assess an account's liquidatable status. It calculates equity by summing up collateral, investment, and credit values, requiring equity to exceed the loan value by a certain threshold to maintain solvency. The Health Factor provides a numeric representation of account health, where values below 125% or close to it may trigger liquidation. Higher values indicate safer positions. You can view your health factor and other key metrics in your Account Overview on the Borrow page.

Liquidation Process

  • Liquidation commences when an account's health factor hits 125%.

  • During liquidation, all account actions, including depositing, withdrawing collateral, borrowing, claiming, and depositing into strategies, are disabled.

  • Strategy withdrawals are executed by an automated liquidator contract.

  • Account owners can prevent complete liquidation by depositing USDB and using the repay function to clear their debt, transitioning the account back to a healthy state.

  • In the liquidation process:

    • Vault positions are unwound and converted into USDB.

    • Collateral is automatically converted to USDB to repay any debt

  • Upon debt repayment, the account is marked as healthy, and any remaining USDB can be claimed by the account owner.

  • A 5% fee of the notional amount liquidated is charged to JUICE as a liquidation fee, with waived fees for bad debt generated for lenders.

Improving Loan Health

Liquidations protect liquidity providers' capital from directional market risks. You can improve your loan health by:

  1. Adding Collateral: Increase the Health Factor by depositing more collateral, typically in the form of WETH.

  2. Decreasing Debt: Repay USDB on the borrow tab to lower leverage, thereby improving the health factor. This may necessitate unwinding active vault strategies if USDB is unavailable.

Oracles

Price feeds are sourced from the following providers:

All assets use the classic push model, which means that the provider has the price pushed on-chain every so often, given some set of parameters. Juice Contracts that rely on this pricing pull from these providers.

Juice uses Api3 dAPIs as the primary solution for asset pricing. Api3's dAPIs are on-chain decentralized data feeds sourced directly from first-party oracles owned and operated by API providers themselves (using Airnode) and are continuously updated using signed data.

Each dAPI price feed has a heartbeat and deviation threshold to ensure that the data is lively.

Price Feeds

AssetPrimaryFallback

ETH

Api3

Redstone

USDB

Api3

Redstone

ezETH

Api3

N/A

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