Liquidations

Liquidations repay debt from an unhealthy or expired Credit Account. This page explains when liquidation is possible and routes liquidators through the execution flow.

When an account is liquidatable

An account can be liquidated when:

• its health factor is below 1.0; or
• its configured Credit Facade expiration has passed and the account still has debt.

Full liquidation

A full liquidation lets the liquidator buy the account's complete collateral portfolio at a discount. All debt is settled and the Credit Account closes. See Full Liquidation for execution details.

The standard entrypoints are permissionless while the Credit Facade is active. If it is paused, only an approved emergency liquidator can execute them. Loss-policy and asset-specific eligibility checks can also apply.

If a full liquidation transfers pending redemption positions, continue with Delayed Redemptions Liquidation for redeemer monitoring and claims.

Recommended flow

1. Discover accounts that are unhealthy or expired.
2. Inspect the exact outcome, including the underlying amount to pay and the collateral to receive.
3. Obtain the execution requirements: the optional approval and unsigned liquidation transaction.
4. Pass them to the operator's transaction pipeline for simulation, signing, and submission.

Continue with Full Liquidation.