Liquidation Incentive Factor

Liquidators can acquire the collateral value of an unhealthy loan up to 100% of the account’s debtor position in addition to the liquidation incentive.

The Liquidation Incentive Factor (LIF), a concept borrowed from Morpho's LIF, is based on the market LLTV. The following formula applies:

𝐿𝐼𝐹=𝑚𝑖𝑛(𝑀,1𝛽∗𝐿𝐿𝑇𝑉+(1−𝛽))

\text{with } 𝛽=0.3 \text{ and } 𝑀=1.15

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Liquidators can acquire the collateral value of an unhealthy loan up to 100% of the account’s debtor position in addition to the liquidation incentive.

The Liquidation Incentive Factor (LIF), a concept borrowed from Morpho's LIF, is based on the market LLTV. The following formula applies:

𝐿𝐼𝐹=𝑚𝑖𝑛(𝑀,1𝛽∗𝐿𝐿𝑇𝑉+(1−𝛽))

\text{with } 𝛽=0.3 \text{ and } 𝑀=1.15