Liquidations

Liquidation event takes place when the position of a Liquidity Provider move against them to the point where the loan to value ratio (LTV) goes above the position maintenance requirements. The maintenance margin threshold is between 84% of the initial margin at max leverage 5x (Stable Coin Farming), and 83% threshold at 5x leverag depending on the risk factor.

We are working hard in order to bring the threshold as close to 90% as possible. As we upgrade our infrastructure and harden our systems we will be increasing leverage as well as margin thresholds.

Token Pair
Leverage
Margin Threshold

USDC/USDT

5x

84%

SOL/USDC

5x

83%

JUP/SOL

5x

83%

SOL/PENGU

5x

83%

LiquidationThreshold = (MaxLeverage - 1 ) ⋅ 1.05 / MaxLeverage where MaxLeverage - maximum allowed leverage for a market

If loan to value ratio is greater or equal to the liquidation threshold then a liquidation event can be called by liquidators and the position is forcefully closed.

Currently a 5% fee is charged for a liquidation event by our platform and paid to whoever called the "Liquidation instruction". This fee is transferred to whoever called the liquidation function (Liquidator). all remaining funds are sent back to the user.

Partial Liquidation

On pools with less liquidity and large position sizes, DefiTuna will attempt to liquidate the position in parts. This means that, in the event of an unsuccessful liquidation, instead of closing the entire position (100%), DefiTuna will first attempt to liquidate 50% of the position, followed by 25%, until a liquidation eventually takes place.

Last updated