Liquidation

Liquidation is a process that occurs when HF of a borrower falls below 1 because the borrower's collateral does not adequately cover the value of the deposit/borrow. This can happen when the value of the collateral decreases or the value of the deposit/borrow increases with respect to each other. Therefore, after the liquidation, as previously explained in the Depositing, 80% of amount liquidated will be used for APOLLO token buyback.

The liquidation penalty depends on the asset used as collateral. You can find every asset's liquidation penalty in Risk Parameters.

How to prevent from liquidation

Users should add more collateral or repay some of their debt before their Health Factor (HF) drops below 1 to prevent liquidations.