Liquidations
A position whose collateral ratio falls below its group's liquidation threshold can be liquidated by anyone holding eUSD. Liquidation keeps the system solvent by retiring risky debt before it becomes bad debt.
| Risk group | Liquidation threshold | Bonus |
|---|---|---|
| A: ETFs (SPY, QQQ, GLD) | 120% | 5% |
| B: ETH (WETH) | 140% | 5% |
| C: Big tech | 131.25% | 5% |
| D: High growth | 144% | 5% |
Mechanics
liquidate(collateral, owner, amount, hint) burns up to amount of the liquidator's own eUSD against the position's debt. In exchange the liquidator receives collateral worth repaid × 1.05 (the 5% bonus), capped at the position's collateral. It uses the latest oracle price with no age bound, so an unsafe position can always be cleared.
| Rule | Detail |
|---|---|
| Who can liquidate | Anyone. Liquidation is permissionless |
| Bonus | 5% of the repaid value, paid in the position's collateral |
| Partial liquidation | Supported. The remainder must keep at least the minimum debt, and the collateral taken is capped pro rata, so the remaining position's ratio never gets worse |
| Surplus | On a full liquidation, remaining collateral transfers to the owner in the same transaction |
| Underwater positions | No refund; the liquidator absorbs the shortfall |
Worked example
Position: $150 of SPY collateral, 100 eUSD debt. SPY drops until the ratio hits 118%.
| Step | Amount |
|---|---|
| Liquidator burns | 100 eUSD |
| Liquidator receives | $105 of SPY (5% bonus) |
| Owner receives back | $13 of SPY surplus, same transaction |
| Owner keeps | The 100 eUSD they originally minted |
The owner loses the buffer between the threshold and 105%, not their whole position, and never owes anything beyond the collateral.
Run a liquidator
Own does not run a liquidation bot: liquidations are open to everyone, and the 5% bonus is the reward. To make that easy, Own's keeper publishes every open position with its live ratio:
GET https://status.own.money/positions
Each entry lists the manager, collateral token, owner, collateral, debt, ratio in basis points and a liquidatable flag. Pass the collateral and owner straight to that manager's liquidate. Compute the hint with findInsertHint for a partial liquidation; a full one can pass the zero address.
Direct keeper model (no stability pool)
Liquity v1 absorbs liquidations through a pre-funded Stability Pool. Own uses direct liquidation instead: the liquidator must hold or acquire eUSD at the moment of liquidation. This is far less code (the stability pool is where Liquity v2's critical bug lived), at the cost of depending on liquidators holding eUSD in stressed markets. The 5% bonus is the standing incentive for that inventory.
Partial liquidation matters here: a whale who mints most of the supply cannot make themselves unliquidatable, because anyone with any amount of eUSD can clear an unhealthy position in chunks.