Learn how liquidations work in Shroomy Project
health factor
. When a user’s account falls below a health factor of 1, the position becomes eligible for liquidation.
In the event that an account’s health factor drops below the threshold of 1, any external party can initiate a liquidationCall()
function to either the Pool
or L2Pool
contract (for Layer 2 networks). This process allows the liquidator to repay a portion of the outstanding debt and receive discounted collateral in return, known as the liquidation bonus
.