Liquidating
Liquidation ensures that there is always sufficient collateral to cover all PAR tokens. Vaults below a specified health factor are subject to liquidation by profit-seeking actors in the network. Network actors have a financial incentive to trigger liquidations as fast as possible. This has the positive effect of removing risky vaults from the system.
A liquidation fee is charged to the Borrower during liquidation, added to the outstanding debt.
Last modified 1yr ago