Ever wondered why liquidation happens? 🤔
It's a major pain point in #DeFi, and honestly, most platforms lack sufficient safeguards.
@liqwidfinance is changing that with their built-in HEALTH FACTOR gauge! 🚨
It helps you monitor your loan's health and avoid liquidation stress.
The HEALTH FACTOR is a risk indicator that shows how close you are to liquidation. The lower it is, the higher the risk.
Before you dive in, check out my previous tweet on how liquidation works on #Liqwid! https://t.co/eKN3fedm1w
Let's get into this properly.
▶️Next is how loans are initiated on #LiqwidFinance.
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Happy #TGIF! 🎉 Let's dive into learning! 📚
Big thanks to @KylixAfonso for shedding light on liquidation in #LiqwidFinance on Discord! 🙌
📌 Let's break it down:
🎯Liquidation occurs when a borrower's collateralization ratio falls below the required threshold.
🎯Liquidators step in, paying off the loan and claiming the collateral.
🎯Liquidation fees are paid to the liquidator.
What does this mean for #LQ stakers?
✅No direct additional revenue from liquidations.
✅Previously accrued interest is offset, maintaining ecosystem stability.
Important Note:
✔️ Liquidations don't generate additional revenue for #LQ stakers.
✔️ The interest repaid during liquidation has already been distributed to $LQ stakers as forward accrued revenue.
🏃 Join the conversation and contribute:
💧Participate in @liqwidFinance's #LCIMP
💧Learn, share, and grow with the #LQ and #Cardano ecosystem
Let's keep learning and building together! 🚀
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Are you looking for a way to explore the breakdown of @liqwidfinance Wisdom course, Curious about the insights and learnings from the course content on $LQ
Head over to the thread for Wisdom course insights #LiqwidFinance#DeFi#LQ
Be part of the #LCIMP movement, help craft the next chapter of #DeFi learning and growth! ✍️📚
Make it 💧
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