handle.fi
πŸ’±convertπŸ’ΉapplicationπŸ’­discord
English
English
  • πŸ‘‹introduction
  • πŸ› οΈhandle.fi use cases & benefits
  • FOREX
    • πŸ’±FOREX tokenomics
    • πŸ—³οΈgovernance staking (veFOREX)
      • obtain fxUSD/FOREX BPT & lock for veFOREX
    • πŸ‘œhow to buy FOREX
  • Platform Functions
    • ⭐getting started
    • πŸ’Ήtrade
      • assets
      • πŸ“”how to trade
    • πŸ’΅convert
      • πŸ“˜how to convert
    • 🏧borrow
      • πŸ›οΈCDP vaults and collateral
      • ⚠️CDP liquidations
      • πŸ›‘οΈfxKeeper
      • πŸ’²repay
      • πŸ“—how to borrow
    • πŸ’°earn
      • πŸ“šhow to earn
    • πŸŒ‰bridge
    • 🌊liquidity pools
      • πŸ’±handle Liquidity Pool (hLP)
      • πŸŒ™curve handle3pool
      • πŸŒ™curve handleFRAXBP
      • 🌊FOREX pools
        • Balancer (80/20) FOREX/fxUSD (arb)
        • UniV3 FOREX/WETH (main)
      • 🌊fxToken - FX liquidity pools
    • πŸ’°fees & collateral parameters
      • protocol fee distributions
    • πŸ“–definitions
  • protocol rewards
    • πŸ”­overview
    • ▢️active
      • πŸ₯³trader incentive pool rewards (TIPR)
      • πŸ–ΌοΈNFT series: t0-Troopers
    • ⏸️paused
      • 🎁trader rewards
      • 🀝referral program
      • πŸ‘¨β€πŸ’»quests
        • πŸ₯§Protocol Incentive Experiments (PIEs)
          • PIE #1 - retweets
          • PIE #2 - memes
          • PIE #3 - bonus rewards
          • PIE #4 - content production
          • PIE #5 - referrer program
          • PIE #6 - troop participation program
          • PIE #7_b - convert & win
  • protocol SPECS
    • πŸ“œcontracts
    • πŸ”protocol audit - Peckshield
    • πŸ‘οΈoracles
    • πŸ“Šsubgraph
  • How to guides
    • πŸ”©adjusting settings
    • πŸ‘¨β€πŸŽ“how to open an account
    • πŸŒ‰bridge
    • 🏠dashboard
  • Socials
  • website
  • twitter
  • discord
  • github
  • substack
  • youtube
  • MARKETING
    • branding, assets, images & memes
  • $FOREX data
    • CoinGecko
    • CoinMarketCap
    • Arbiscan
    • Etherscan
Powered by GitBook
On this page

Was this helpful?

  1. Platform Functions
  2. borrow

CDP liquidations

vault liquidation to ensure maintenance of system c-Ratios

PreviousCDP vaults and collateralNextfxKeeper

Last updated 1 year ago

Was this helpful?

as a collateral backed debt issuance platform, it is important that vault and system collateral is maintained at appropriate levels to back any fxToken debt; ensuring each remains representative of their underlying currencies face value. the core principles, underpinning the protocol liquidation process are;

  • if the collateral value, or c-Ratio, of a vault falls below its minimum c-Ratio, that vault is deemed to be 'at risk' or "underwater'. In this state it can be subject to a 1:1 redemption call on its collateral by fxToken holders.

    • this mechanism ensures that in the case an fxToken trades at a discount to its face value, an arbitrage opportunity exists, thus creating an incentive to drive it back to parity.

*only collateral from vaults that have a current c-Ratio < min c-Ratio can be redeemed against.

redemption contraction can be accessed through .

  • if a vault's c-Ratio falls below its liquidation trigger it will automatically be subject to a liquidation process to repay excessive debt and bring the collateral ratios back to acceptable limits.

    • handle.fi makes use of its to ensure that liquidation is promptly triggered and executed.

vaults are liquidated when the c-Ratio falls below 160%

the liquidation process

  1. when a vault falls below it's c-Ratio liquidation trigger, liquidation begins.

  2. sufficient vault collateral is sold (largest position to smallest holdings) to repay enough fxToken debt and return the c-Ratio to its required minimum plus a 10% buffer.

  3. a is the charged to the vault being liquidated. this fee is disbursed to protocol and the relevant fxKeeper pool that funded the liquidation. *any accrued $FOREX rewards for that vault are forfeited; transferred to the fxKeeper pool and protocol.

🏧
⚠️
arbiscan
fxKeeper pools
liquidation fee