Liquidations

Liquidations are designed to be a last resort, not a revenue engine. The protocol attempts soft liquidation first — partial repayment with a small bonus — before falling back to full liquidation.

Trigger

A position becomes liquidatable when its health factor crosses below 1.0. The Helmsman agent pre-warns the user multiple times before this threshold is reached.

Soft liquidation

A keeper (anyone) repays up to close factor (default 50%) of the debt and receives the equivalent in collateral plus a 5% bonus. This restores health and gives the user a chance to recover.

Full liquidation

If health falls past a secondary threshold (default 0.92), keepers can repay 100% and seize all collateral with a 7% bonus. This protects pool solvency.